HMRC has published the latest advisory fuel rates (AFR) for company car users, effective from 1 June 2018. The new rates reflect the rise in fuel prices for higher emission cars.
The new rates have slightly increased on the previous quarter rates, for petrol cars with engine of 1400cc or more and diesel cars with an engine size less than 1600cc. The previous rates can be used for up to one month from the date the new rates apply. HMRC reviews rates quarterly on 1 March, 1 June, 1 September and 1 December.
The rates only apply in the following circumstances:
- to reimburse employees for business travel in their company cars.
- when employees need to repay the cost of fuel used for private travel.
When employees are reimbursed for business travel in their company cars, HMRC will accept there is no taxable profit and no Class 1A national Insurance to pay.
Advisory fuel rates from 1 June 2018
|Engine size||Petrol – amount per mile (Mar 18 rate in brackets)||LPG – amount per mile|
|1400cc or less||11p (11p)||7p (7p)|
|1401cc to 2000cc||14p (14p)||9p (8p)|
|Over 2000cc||22p (22p)||14p (13p)|
|Engine size||Diesel – amount per mile|
|1600cc or less||10p (9p)|
|1601cc to 2000cc||11p (11p)|
|Over 2000cc||13p (13p)|
Hybrid cars are treated as either petrol or diesel cars for this purpose.
HMRC agent talking points meeting: VAT and motoring expenses
HMRC will be hosting an online agent talking points meeting: VAT and motoring expenses on 31 May 2018.
This webinar will provide a reminder of the general rules that apply when reclaiming VAT on the purchase of cars and when hiring and leasing vehicles. HMRC will briefly cover commercial vehicles, other motoring expenses and record keeping. There will be the usual opportunity to ask HMRC subject matter experts any questions.
- Thursday 31 May – 10.30–11.30am: register at https://tinyurl.com/y9hq2y75
Questions for HMRC subject experts should be sent to firstname.lastname@example.org more than 24 hours prior to the meeting, including the title of the meeting in the ‘Subject’ line of the email. Any questions that arise after this time should be submitted during the live meeting..