HMRC has published the latest advisory fuel rates (AFR) for company car users, effective from 1 December 2019 cutting standard 1600cc minus mileage rates by 1p per mile to reflect lower fuel costs
The advisory fuel rates apply from 1 December 2019 have decreased by 1p per mile for vehicles under 1600cc reflecting cuts in diesel prices over the last quarter, while LPG rate for 1400cc and below vehicles has been cut by 1p to 9p per mile. The previous rates, effective September 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 unchanged at 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 December 2019
Petrol - amount per mile
LPG - amount per mile
1400cc or less
1401cc to 2000cc
Diesel - amount per mile
1600cc or less
1601cc to 2000cc
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.
Report by Zak Jakubowski