HMRC has released its quarterly figures for Advisory Fuel Rates and Advisory Electricity Rates, and after adjusting the way reimbursement rates for electric vehicles are calculated, have raised the amount drivers can claim back, while reducing petrol and diesel figures.
Last year, HMRC advised that it was going to include figures from the Office for National Statistics quarterly index for domestic electricity, which forms part of the Consumer Price Index. These would be used alongside data it already analysed from the Department for Business, Energy & Industrial Strategy (now restructured as the Department for Business and Trade) and the Department for Transport.
The consequence is that the rate drivers can claim back for business mileage in electric vehicles has risen from 8p per mile, to 9p per mile.
This comes on the back of a 3p increase in December 2022, when the rate was previously 5ppm, and reflects the increased cost of electricity, both at home and in public, where prices in the UK have risen by nearly 67% in the past 12 months.
While an increase will help, as Allstar figures showed, at 8ppm a driver charging at typical home rates and averaging 3 miles per kWh would be out of pocket by £600 over 20,000 miles a year. The 1ppm increase would allow them to claim back a further £200, but would still be £400 short.
HMRC has reduced almost all rates for petrol and diesel company car mileage reimbursement, by as much as 3p per mile.
The changes reflect falling forecourt prices, which have seen the average cost of a litre of petrol drop from around 160p in early December to 148p at the end of February, and diesel fall from 184p per litre to 167p per litre over the same period.
The largest cut is for petrol cars with engines over 2,000cc, which has been cut from 26 to 23ppm. Similarly-sized diesel engine cars have had their rate cut by 2ppm, from 22 to 20ppm.
Diesel cars from 1,601cc to 2,000cc have reduced from 17 to 15ppm, while those under 1,600cc have dropped by 1p to 13ppm.
Petrol engines from 1401 to 2,000cc drop from 17p to 15ppm, and 1,400cc and below by 1p to 13ppm.
From 1 March 2023
Petrol — rate per mile
LPG — rate per mile
1400cc or less
1401cc to 2000cc
Diesel — rate per mile
1600cc or less
1601cc to 2000cc