As of 1st June 2016, HMRC have updated their Advisory Fuel Rates. The following rates will apply to employees using a company car.
|Engine Size||Petrol – amount per mile||LPG – amount per mile|
|1400cc or less||10 pence||7 pence|
|1401cc to 2000cc||13 pence||9 pence|
|Over 2000cc||20 pence||13 pence|
|Engine Size||Diesel – amount per mile|
|1600cc or less||9 pence|
|1601cc to 2000cc||10 pence|
|Over 2000cc||12 pence|
Hybrid cars are treated as either petrol or diesel cars for this purpose.
When can you use the mileage rates?
Mileage rates only apply when you either:
• reimburse employees for business travel in their company cars
• require employees to repay the cost of fuel used for private travel
Reimburse employees for business travel in their company cars
If you pay a rate per mile less than or equal to the Advisory Fuel Rates for business travel for a certain engine size and fuel type, HMRC will accept there is no taxable profit.
You may use your own rates if these better reflect your circumstances. For example, your company cars may be more fuel efficient. However, if you pay rates greater than the advisory fuel rates, but cannot show the fuel cost per mile is higher, there is no fuel benefit charge if the mileage payments are purely for business miles.