HMRC has published new ‘advisory fuel rates’ (AFR) for company cars, which apply to journeys from 1 September 2016.
Advisory fuel rates are set by HMRC so that employers can use these rates to reimburse company car drivers for business fuel.
These rates can also be used if employees are required to repay the cost of fuel used for private travel.
These rates should not be used in relation to vans.
Hybrid cars can be treated as either petrol or diesel cars.
These amounts also apply for VAT purposes, but employers can only reclaim input VAT if the employee supplies a receipt.
Advisory Fuel Rates from 1 September 2016
Engine size Petrol – per mile LPG – per mile Diesel – per mile
1400cc or less 11 pence 7 pence 9 pence
1400cc to 2000cc 13 pence 9 pence 11 pence
Over 2000cc 20 pence 13 pence 13 pence
To give employers time to change their systems, for journeys up to 30 September 2016 they may use the the old or the new rates.
If you would like to discuss, or want help, call Lee Reynolds on 01788 539000.