HMRC has published the latest advisory fuel rates (AFR) for company car users, effective from 1 March 2016 reflecting the downward trend in forecourt fuel prices
These rates apply from 1 March 2016 and have been reduced on the previous quarter rates. The previous rates 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.
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 2016
Petrol/LPG
Engine size | Petrol - amount per mile | LPG - amount per mile |
1400cc or less | 10 pence | 7 pence |
1401cc to 2000cc | 12 pence | 8 pence |
Over 2000cc | 19 pence | 13 pence |
Diesel
Engine size | Diesel - amount per mile |
1600cc or less | 8 pence |
1601cc to 2000cc | 10 pence |
Over 2000cc | 11 pence |
Hybrid cars are treated as either petrol or diesel cars for this purpose.
HMRC review rates quarterly on 1 March, 1 June, 1 September and 1 December.