News added on 01.06.2017

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Fuel

Company cars – latest advisory fuel rates

HMRC has updated its advisory fuel rates with effect from 1 June 2017.

Reimbursement. The advisory fuel rate (AFR) is mainly of use in two situations. Firstly, where an employee personally pays for fuel used in their company car or van and claims reimbursement from their employer for business mileage. Secondly, where the business pays for all fuel, e.g. via a company fuel card or account at a petrol station, and requires the employee to reimburse it for the cost of their non-business mileage.

No tax or NI for employee. Using the AFR means a company doesn't need to work out the actual cost of fuel per mile for each of its company vehicles. It can reimburse its employees safe in the knowledge that HMRC will accept that the payment doesn't trigger a benefit-in-kind charge.

New rates. The table below shows the new rates that apply from 1 June 2017 with the previous rate in brackets where there has been a change. Note that petrol hybrid cars are treated as petrol cars for this purpose.

 

Engine size

Petrol

LPG

1,400cc or less

11p

7p

1,401cc to 2,000cc

14p

9p

Over 2,000cc

21p (22p)

14p

 

Engine size

Diesel

1600cc or less

9p

1601cc to 2000cc

11p

Over 2000cc

13p

The new advisory fuel rates apply from 1 June 2017. But the rate changes only affect petrol cars with engine sizes over 2,000cc.

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