Company car drivers will see changes to the amount they can claim back for fuel costs from their employer from 1 March.
HM Revenue & Customs (HMRC) has also confirmed that the way the advisory electricity rate (AER) is calculated has been changed to better reflect energy prices, particularly with soaring electricity costs, when it is reviewed quarterly.
Previously it has been based solely on an annual figure published by the Department for Business, Energy & Industrial Strategy (BEIS), and the electrical energy consumption values for each car model, provided by the Department for Transport (DfT).
HMRC will continue to use the BEIS and DfT data but will now also incorporate figures published in the Office for National Statistics (ONS) quarterly index for domestic electricity.
The new rates include a 1 pence per mile (ppm) increase in the advisory electricity rate (AER) used to reimburse drivers of electric company cars.
In contrast, and to reflect falling fuel prices, petrol, diesel and LPG advisory fuel rates (AFRs) have been reduced from 1 March.
Rates cut for petrol and diesel
The rates for petrol company cars have all been cut, with the AFR for petrol vehicles up to 1,400cc now 13 ppm.
Vehicles powered by 1,401-2,000cc engines see a decrease of 2 ppm, to 15 ppm. For engines larger than 2,000cc the AFR sees the biggest reduction of 3 ppm, to 23 ppm.
For diesel, cars up to 1,600cc there is a reduction of 1 ppm, to 13 ppm, and engines from 1,601-2,000cc see a reduction of 2 ppm to 15 ppm. The 2,000cc rate is cut by 2 ppm to 20 ppm.
For LPG vehicles up to 1,400cc, the rate remains the same at 10 ppm but has been cut by 1ppm to 11ppm for vehicles with an engine size of 1,401-2,000cc. For engines greater than 2,000cc, there is also a reduction of 1 ppm to 17 ppm.
Hybrid cars are treated as either petrol or diesel cars for AFR purposes.
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