HMRC has published the latest advisory fuel rates (AFR) for company car users, effective from 1 March 2020 cutting mileage rates for diesel and petrol vehicles with 2000cc or more by 1p per mile
The advisory fuel rates that apply from 1 March 2020 have decreased by 1p per mile for Diesel vehicles over 2000cc reflecting cuts in diesel prices over the last quarter, while the Petrol amount per mile for vehicles over 2000cc has been cut by 1p to 20p per mile. The previous rates, effective December 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 March 2020
Engine size | Petrol - amount per mile | LPG - amount per mile |
1400cc or less | 12p | 8p |
1401cc to 2000cc | 14p | 10p |
Over 2000cc | 20p | 14p |
Engine size | Diesel - amount per mile |
1600cc or less | 9p |
1601cc to 2000cc | 11p |
Over 2000cc | 13p |
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
