New advisory fuel rates published

Advisory fuel rates are intended to reflect actual average fuel costs and are updated quarterly. The rates can be used by employers who reimburse employees for business travel in their company cars or where employees are required to repay the cost of fuel used for private travel.

HMRC accepts there is no taxable profit and no Class 1A National Insurance on reimbursed travel expenses where employers pay a rate per mile for business travel no higher than the published advisory fuel rates.

Employees can also use the advisory fuel rates to repay the cost of fuel used for private travel. In this case, HMRC will accept there’s no fuel benefit charge. The advisory rates are not binding if you the employer can demonstrate that employees cover the full cost of private fuel by repaying at a lower rate per mile.

The latest advisory fuel rates became effective on 1 March 2018. Fuel rates are reviewed four times a year with changes taking effect on 1 March, 1 June, 1 September and 1 December. You can use the previous rates for up to 1 month from the date the new rates apply.

The rates are as follows:

Engine size     Petrol – amount per mile     LPG – amount per mile
1400cc or less 11p 7p
1401cc to 2000cc 14p 8p
Over 2000cc 22p 13p
Engine size Diesel – amount per mile
1600cc or smaller 9p
1601cc to 2000cc 11p
Over 2000cc 13p

Hybrid cars are treated as either petrol or diesel cars for this purpose.

Posted in Income Tax

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