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
Petrol - amount per mile (Apr 16 rate in brackets)
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 review rates quarterly on 1 March, 1 June, 1 September and 1 December.
The HMRC Advisory Fuel Rates are available here