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).
Quarterly index
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 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 13ppm.
Vehicles powered by 1,401-2,000cc engines see a decrease of 2ppm, to 15ppm. For engines larger than 2,000cc, the AFR sees the biggest reduction of 3ppm, to 23ppm.
For diesel cars up to 1,600cc, there is a reduction of 1ppm to 13ppm, and engines from 1,601cc to 2,000cc see a reduction of 2ppm to 15ppm. The 2,000cc rate is cut by 2ppm as well, taking it down to 20ppm.
For LPG vehicles up to 1,400cc, the rate remains the same at 10ppm, but has been cut by 1ppm to 11ppm for vehicles with an engine size exceeding this, and up to 2,000cc.
The rate for LPG engines greater than 2,000cc is also subject to a reduction of 1ppm, to 17ppm.
Hybrid vehicles are treated as either petrol or diesel cars for the purposes of Advisory Fuel Rates (AFRs).
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