HMRC updates advisory fuel rates for company car users

HMRC has published the latest advisory fuel rates (AFR) for company car users, effective from 1 June 2019. It has increased most mileage rates by 1p per mile to reflect higher fuel costs. The previous rates, effective March 2019, can be used for up to one month from the date the new rates apply.

The rates only apply in the following circumstances:

  • reimburse employees for business travel in their company cars; or
  • require employees to repay the cost of fuel used for private travel.

These rates cannot be used in any other circumstances. If the rates are used, it is not necessary to apply for a dispensation to cover the payments made.

The advisory electricity rate for fully electric cars is 4p per mile. Electricity is not a fuel for car fuel benefit purposes.

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 2019

Petrol – engine size/amount per mile

1400cc or less – 12p

1401cc to 2000cc – 15p

Over 2000cc – 22p

Diesel – engine size/amount per mile

1600cc or less – 10p

1601cc to 2000cc – 12p

Over 2000cc – 14p

LPG– engine size/amount per mile

1400cc or less – 8p

1401cc to 2000cc – 8p

Over 2000cc – 14p

Hybrid cars are treated as either petrol or diesel cars for this purpose.

HMRC reviews rates quarterly on 1 March, 1 June, 1 September and 1 December.

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