News added on 02.06.2014

from HMRC LATEST NEWS

Cars

Advisory fuel rates from 1 June 2014

After carrying out a review of current fuel prices, HMRC has updated its advisory fuel rates (AFRs) with effect from 1 June 2014. However, for most employers, the rates will stay the same.

Purpose of AFRs. By way of a reminder, AFRs are provided by HMRC for employers to apply where they:

  • reimburse employees for business travel using company cars; or
  • require employees to repay the cost of fuel used for private travel in company cars.

By using these rates, employees will not be charged income tax or NI on the payments.

New rates. HMRC routinely reviews the published AFRs every three months. The current rates, effective from 1 June 2014, are as follows:

Engine size

Petrol

LPG

1,400cc or less

14p

9p

1,401cc to 2,000cc

16p

11p

Over 2,000cc

24p

16p (previously 17p)

 

Engine size

Diesel

1,600cc or less

12p

1,601cc to 2,000cc

14p

Over 2,000cc

17p

Only one change. As you can see, the only change relates to that for LPG cars with engines in excess of 2,000cc so, as most company cars are petrol or diesel, it's unlikely that your employees will be affected by the revised rate.

The only number to have changed this quarter is the LPG rate for cars with engines over 2,000cc. Therefore, it's unlikely that you will need to make any changes to the amounts you reimburse your employees for business travel.

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