HMRC has updated some of its advisory fuel rates with effect from 1 March 2017. The changes affect petrol and LPG cars with engine sizes over 2,000cc.
The advisory fuel rate (AFR) is mainly of use:
- Where an employee personally pays for fuel used in their company car or van and claims reimbursement from their employer for business mileage.
- Where the business pays for all fuel, eg via a company fuel card or account at a petrol station, and requires the employee to reimburse it for the cost of their non-business mileage.
Using the AFR means a company doesn’t need to work out the actual cost of fuel per mile for each of its company vehicles. It can reimburse its employees safe in the knowledge that HMRC will accept that the payment doesn’t trigger a benefit in kind charge.
You can use the old rates for up to one month after the new rates apply.
Hybrid cars are treated as either petrol or diesel, according to the engine.
The table below shows the new rates that apply from 1 March with the previous rate in brackets where there is a change.
|1,400cc or less||11p||7p|
|1,401cc to 2,000cc||14p||9p|
|Over 2,000cc||22p (21p)||14p (13p)|
|1,600cc or less||9p|
|1,601cc to 2,000cc||11p|