HMRC advisory fuel rates for company car users from 1 September

20th September 2018

HMRC has published the latest advisory fuel rates (AFR) for company car users, effective from 1 September 2018 reflecting the upward trend in forecourt fuel prices for higher emission cars.

 These rates apply from 1 September 2018 and have increased slightly on the previous quarter rates, for petrol cars with engine of 1400cc or more and diesel cars with an engine size less than 1600cc. 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 September 2018

Engine size Petrol – amount per mile (Mar 18 rate in brackets) LPG – amount per mile
1400cc or less 12p 7p
1401cc to 2000cc 15p 9p
Over 2000cc 22p 13p

 

Engine size Diesel – amount per mile
1600cc or less 10p
1601cc to 2000cc 12p
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.

Advisory Electricity Rate

The Advisory Electricity Rate for fully electric cars is 4 pence per mile.

Electricity is not a fuel for car fuel benefit purposes.

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