As of today, a series of new rules and regulations from HMRC are coming into effect, bringing significant changes for petrol and diesel car owners. These changes impact everything from vehicle charging to car production, and they are set to reshape how company cars are managed, how hybrid cars are classified, and even the rules for electric vehicle (EV) charging points. Whether you’re an employer, an employee, or an EV owner, these updates will affect you. Here’s everything you need to know about the new rules that are reshaping the automotive and energy sectors in the UK.
Changes to Advisory Fuel Rates (AFRs) for Company Cars
One of the key changes introduced by HMRC today involves adjustments to the Advisory Fuel Rates (AFRs) for company cars. AFRs are important because they determine how much employers can reimburse employees for the fuel used in company cars for business purposes. These rates also apply when employees need to repay fuel costs for personal travel.
Starting December 1, 2024, the rates for diesel cars have been adjusted, with significant reductions across the board. For instance, diesel company cars with engines over 2,000cc now have a reimbursement rate of 17p per mile (down from 18p). The new AFR for vehicles with engines between 1,601-2,000cc has been reduced to 13p, down from 14p. For smaller diesel engines under 1,600cc, the rate has dropped from 12p to 11p.
Petrol company car rates have also been slashed, with similar reductions seen across the board. These rates are crucial for employers who want to reimburse their employees fairly for fuel expenses while maintaining compliance with tax rules. However, it’s important to note that these rates do not apply to vans, so businesses with fleets of vans will need to look at separate guidelines.
Hybrid Cars: Treated as Petrol or Diesel
In a bid to streamline the rules, hybrid cars can now be treated as either petrol or diesel vehicles for the purpose of calculating AFRs. This allows for more consistent treatment across different vehicle types and simplifies the process for employers and employees alike. It’s also worth noting that these rates can be used for VAT purposes, provided the employee provides the necessary fuel receipts.
Smart Tachographs for Hauliers
Another significant update that will affect the transport industry is the new deadline for Haulage Vehicle Operators. By December 31, 2024, all HGVs with an analogue or digital tachograph used for international travel must install either a “full” smart tachograph 2 or a “transitional” smart tachograph 2. This new requirement is part of ongoing efforts to improve the accuracy and security of vehicle data, as well as to help authorities monitor driver hours and ensure road safety.
The DVSA has confirmed that from February 21, 2024, all newly registered in-scope vehicles, regardless of journey types, must be fitted with one of these smart tachographs. This change is part of broader efforts to modernize and increase safety in the logistics sector.
New Standards for Electric Vehicle Charging Points
The electric vehicle (EV) market continues to grow rapidly in the UK, and to support this transition, new rules for charging points have been introduced. From November 2024, all electric vehicle charging points with a power output of 8kW and above must provide contactless payment options. Existing chargers with a power output of 50kW or more must also comply with this new rule.
Failure to meet these standards could result in hefty fines of up to £10,000 per charger. With over 68,000 public charge points currently in the UK, operators are under pressure to ensure they meet these new regulations. This change is part of a broader effort to make charging more accessible and convenient for EV owners, while also ensuring that the infrastructure can support the growing demand for electric vehicles.
The Push Towards Zero-Emission Vehicles
The UK government has made it clear that it is committed to reducing carbon emissions and increasing the number of zero-emission vehicles on the road. The aim is to ensure that by 2030, 80% of all cars sold will be electric. By 2035, the sale of petrol and diesel cars will be banned altogether, aligning with the country’s goal to achieve net-zero emissions by 2050.
To encourage car manufacturers to meet these targets, the government has introduced penalties for manufacturers who fail to comply. Starting in 2024, any car manufacturers that fall short of the required sales percentage will face fines of £15,000 per car and £9,000 per van. This new regulation is expected to provide a strong financial incentive for manufacturers to accelerate the production of electric vehicles.
Conclusion
The new HMRC rules affecting petrol and diesel car owners are an important step in the UK’s transition towards a cleaner, greener future. From adjustments to AFRs and the introduction of smart tachographs to the expansion of EV charging infrastructure and the push for zero-emission vehicles, these changes will have wide-ranging implications for car owners, businesses, and the environment.
As the government continues to implement these changes, it’s crucial for businesses and car owners to stay informed and compliant with the new regulations. By doing so, they can ensure that they are not only meeting their legal obligations but also contributing to a more sustainable future for the UK.
These changes also present significant opportunities, especially in the EV sector, which is poised for growth. With the right infrastructure and policies in place, the UK is on track to become a leader in the adoption of electric vehicles, benefiting both the environment and the economy.
