HMRC advisory fuel rates for company car users rise from 1 June 2016

HMRC has published the latest advisory fuel rates (AFR) for company car users, effective from 1 June 2016 reflecting the upward trend in forecourt fuel prices and changing the cc breaks for diesel cars

These rates apply from 1 June 2016 and have been increased 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 June 2016



Engine size

Petrol - amount per mile (Apr 16 rate in brackets)

LPG - amount per mile

1400cc or less

10p (10p)

7p (7p)

1401cc to 2000cc

13p (12p)

9p (8p)

Over 2000cc

20p (19p)

13p (13p)




Engine size

Diesel - amount per mile

1600cc or less

9p (8p)

1601cc to 2000cc

10p (10p)

Over 2000cc

12p (11p)


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.

The HMRC Advisory Fuel Rates are available here

Amy Austin |Reporter, Accountancy Daily [2016-2019]

Amy Austin was reporter, Accountancy Daily and Accountancy magazine, published by ...

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