HMRC Fuel Rates Just Got a Little…Pricier?
So, you drive a company car? Get this – HMRC just tweaked their Advisory Fuel Rates (AFRs), and they’ve gone up a bit, starting March 1st, 2025. It’s a small change, but it’s worth knowing about, especially if you’re using your work car for business trips. This affects how much you’ll get reimbursed for fuel.
What’s the Deal with these AFRs Anyway?
HMRC’s AFRs are basically guidelines for companies to use when paying back employees for fuel used on work journeys. Think of them as a fair-use policy, making sure everyone gets reimbursed reasonably. They update these rates every quarter to keep up with the ever-changing fuel prices. The amount you get back depends on things like your engine size and what type of fuel your car runs on.
The March 2025 Update: What Changed?
The main takeaway? A few small increases for certain vehicles. Nothing too dramatic, but it’s noticeable.
Petrol cars (1401cc - 2000cc): These mid-sized petrol cars will see an extra 1p per mile added to their reimbursement rate. That’s 1 penny more per mile that your employer can reimburse you for fuel costs.
Diesel cars (Up to 1600cc): Similar story here, smaller diesel engines are seeing a 1p per mile increase.
Electric vehicles: No changes here, the rate stays put at 7p per mile. It seems the electric vehicle revolution is still not causing ripples in the HMRC fuel rate system yet.
Why the Bump in Prices?
It’s pretty straightforward, really. These small increases directly reflect the recent price fluctuations in petrol and diesel. HMRC keeps a close eye on fuel costs and adjusts the AFRs accordingly. They want to avoid underpaying or overpaying, which is fair enough.
What Does This Mean for You and Your Boss?
For employers, it simply means updating their reimbursement policies to reflect the new rates, effective March 1st, 2025. No major upheaval, just a minor adjustment. For employees, it's a small increase in the fuel reimbursements, which is nice. It helps a little with those ever-increasing fuel costs.
The Bottom Line: Small Change, Big Impact
Essentially, it’s a minor adjustment that primarily affects petrol and diesel drivers with specific engine sizes. Keeping tabs on these updates is essential for both employers and employees to ensure everything's above board and everyone gets a fair deal. To get the most up-to-date info, always double-check the official HMRC website; after all, nothing beats checking the source directly.
