HMRC release the latest AFRs for company car drivers

HMRC has published their latest Advisory Fuel Rates (AFRs) which will be effective from 1st September 2021. AFRs are used for company car drivers claiming back fuel costs from their employer.

Petrol and diesel pence per mile (PPM) rates for all three engine-size ranges have been increased to reflect rising fuel prices, while all three LPG rates fall. Please see the tables below for actual rates and other changes include:
  • The diesel rate for company cars with a engine size of more than 2,000cc increases by 2ppm
  • The AFR rates for diesel cars up to 1,600cc and from 1,601-2,000cc are also increased, by 1ppm, to 10ppm and 12ppm, respectively
  • For petrol company cars, all three rates have also increased by 1ppm
  • All fuel rates have decreased for LPG-powered vehicles. The new LPG reimbursement rate for vehicles up to 1,400cc is 7ppm, down from 8ppm, and 8ppm for vehicles with an engine size of 1,401-2,000cc, down from 9ppm.
  • The AFR rate for LPG vehicles with an engine greater than 2,000cc decreases by 2ppm, from 14ppm to 12ppm
  • Hybrid cars are treated as either petrol or diesel cars for AFR purposes
  • The advisory electricity rate (AER) for plug-in cars again remains unchanged at 4ppm

Petrol vehicles

Engine size (cc) Mean MPG Mean MPG Fuel price (per litre) Fuel price (per gallon) Rate per mile Advisory fuel rate
Up to 1400cc 54.2 52.7 134.8 pence 612.7 pence 11.6 pence 12 pence
1401 - 2000cc 46.1 44.9 134.8 pence 612.7 pence 13.6 pence 14 pence
Over 2000cc 30.8 30.0 134.8 pence 612.7 pence 20.4 pence 20 pence

Diesel vehicles

Engine size (cc) Mean MPG Applied MPG Fuel price (per litre) Fuel price (per gallon) Rate per mile Advisory fuel rate
Up to 1600cc 65.4 63.6 136.8 621.8 9.8 pence 10 pence
1601 to 2000cc 52.9 51.3 136.8 621.8 12.1 pence 12 pence
Over 2000cc 43.5 42.1 136.8 621.8 14.8 pence 15 pence

LPG (liquefied petroleum gas) vehicles 

Engine size (cc) Mean MPG Applied MPG

Fuel price(per litre)

Fuel price (per gallon) Rate per mile Advisory fuel rate
Up to 1400cc 43.3 42.2 63.4 pence 288.2 pence 6.8 pence 7 pence
1401 - 2000cc 36.9 35.9 63.4 pence 288.2 pence 8.0 pence 8 pence
Over 2000cc 24.7 24.0 63.4 pence 288.2 pence 12.0 pence 12 pence

Hybrid and Electric Vehicles

Since September 2018 the HMRC has produced the Advisory Electricity Rate (AER) for battery electric vehicles. This has been set at 0.04ppm and is published together with the AFRs for petrol, diesel and LPG vehicles. The rate for 2021 is unchanged and remains at 0.04ppm. Plug-in hybrid and hybrid cars continue to be treated as either petrol or diesel models for mileage reimbursement purposes.

You can use the previous rates for up to one month from the date the new rates apply.


Contact us

If you would like more information on AFRs, how they apply to company car drivers or to talk to one of our team please use the contact button below or email info.derby@pendragon.uk.com