HMRC releases new advisory fuel rates for company car users

With the price of fuel going up, employees and businesses will welcome new changes to the fuel advisory rates, which from 1 September 2018 have slightly increased on the previous quarter for some vehicles.

Advisory fuel rates from 1 September 2018

Engine size Petrol – amount per mile LPG – amount per mile
1400cc or less 12p (11p) 7p (7p)
1401cc to 2000cc 15p (14p) 9p (9p)
Over 2000cc 22p (22p) 13p (14p)

 

Engine size Diesel – amount per mile
1600cc or less 10p (10p)
1601cc to 2000cc 12p (11p)
Over 2000cc 13p (13p)

Previous rate in brackets. These can be used for up to one month from the date the new rates apply (Hybrid cars are treated as either petrol or diesel cars for this purpose).

Advisory fuels rates apply when:

  • reimbursing employees for business travel in their company cars; or
  • requiring employees to repay the cost of fuel used for private travel.

HMRC reviews rates quarterly on 1 March, 1 June, 1 September and 1 December.

If you operate your own car, van or motorcycle as part of your business you can calculate your expenses using a flat rate for mileage instead of the actual costs of buying and running your vehicle, such as insurance, repairs, servicing and fuel.

The rates for this are as follows:

Vehicle Flat rate per mile with simplified expenses
Cars and goods vehicles first 10,000 miles 45p
Cars and goods vehicles after 10,000 miles 25p
Motorcycles 24p

Link: Advisory Fuel Rates