News added on 27.02.2013


Company cars

New advisory fuel rates

HMRC has updated its advisory fuel rates with effect from March 1 2013. 

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 their 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 March 1 2013. Note. Petrol hybrid cars can be treated as either petrol or diesel cars for this purpose.

Engine size

Petrol (no change)


1,400cc or less


10p (down from 11p)

1,401cc to 2,000cc


12p (down from 13p)

Over 2,000cc



Engine size


1,600cc or less

13p (up from 12p)

1,601cc to 2,000cc


Over 2,000cc


Up to one month from the date of the change, it’s up to the employer whether to use the previous or new current rates.

New advisory fuel rates apply from March 1 2013. Employees can reimburse their employers at these rates to avoid a tax charge on fuel they've used for private journeys in a company car.

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