On March 1, the HMRC published its new Advisory Fuel Rates (AFRs) aimed at employers who reimburse their employees’ private mileage while using company vehicles.

There have been very slight reductions in the suggested pence per mile values employees should claim back when driving for work purposes, in line with the price of fuel dropping in recent months.

Where the employer does not pay for any fuel for the company car, the following AFRs are recommended to be reimbursed in respect of business journeys without the amount being taxable on the employee.

Petrol vehicles

1400cc or less: 13p (down from 14p)

1401cc to 2000cc: 15p (down from 16p)

2001cc or more: 24p (down from 26p)

Diesel vehicles

1600cc or less: 12p (down from 13p)

1601cc to 2000c: 14p (down from 15p)

2001cc or more: 19p (down from 20p)

LPG (Liquefied petroleum gas) vehicles

1400cc or less: 11p (up from 10p)

1601cc to 2000cc: 13p (up from 12p)

2001cc or more: 21p (up from 18p).

AFRs for fully electric vehicles are recommended as 9p per mile, while hybrid cars share the same rate for the petrol or diesel vehicles with the same engine size.

Shelley O’Neill, a Tax Advisor based from our Carlisle office, said: “It’s not surprising that the advisory fuel rates for petrol and diesel have reduced for this quarter due to the overall reduction in fuel prices over the last year, however it is strange that the authorised mileage rate hasn’t changed since 2011.”

The HMRC publishes new AFRs each quarter with the next list due on June 1. Further dates for the year are September 1 and December 1.

More information on AFRs can be found here.

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