EV rate cut in HMRC’s December 2023 AFRs

Company Fleet  Electric Vehicles  HMRC / Tax 

The Advisory Electric Rate (AER) - having been upped by a penny per mile last quarter - has been cut back by 1p to 9p per mile.

The HMRC’s latest Advisory Fuel Rates (AFRs) have now been published and while diesel company car drivers will welcome the increases across all engine bands, the news for drivers of electric vehicles (EVs) is less welcome with a drop - by 1p per mile - in the amount that can be claimed.

The AFRs and AERs can be used to reimburse drivers of company cars for business mileage without incurring punitive fuel tax. If your company provides all fuel - perhaps on a fuel card - then drivers can reimburse the business for the private mileage undertaken in their car by using the AFRs.

The new rates can be used immediately, or if preferred - and this may be the choice of EV drivers -  the last quarter’s rates can still be used during December. However, the latest AFR and AER rates must be used from 01 January 2024 onwards.

Drivers of hybrid and plug-in hybrid vehicles should use the appropriate petrol or diesel AFR figures.

The new AFRs from 01 December 2023 are:

Diesel (inc. hybrid): engine size (cc)	Advisory Fuel Rate (AFR)
Up to 1,600cc	13 pence (minus 1p)
1,601cc - 2,000cc	15 pence (minus 1p)
Over 2,000cc	19 pence

Petrol (inc. hybrid): engine size (cc)	Advisory Fuel Rate (AFR)
Up to 1,400cc	14 pence (no change)
1,401cc - 2,000cc	16 pence
Over 2,000cc	26 pence

Electric: fyully-electric	Advisory Fuel Rate (AFR)
All models	9 pence

Source: HMRC Advisory Fuel Rates

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