HMRC ADVISORY FUEL RATES FOR COMPANY CAR USERS RISE FROM 1 SEPTEMBER

25th August 2016

HMRC has published the latest advisory fuel rates (AFR) for company car users, effective from 1 September 2016 reflecting the upward trend in forecourt fuel prices

 

These rates apply from 1 September 2016 and have been increased on the previous quarter rates. The previous rates can be used for up to one month from the date the new rates apply.

 

The rates only apply in the following circumstances:

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

 

These rates cannot be used in any other circumstances. If the rates are used, it is not necessary to apply for a dispensation to cover the payments made.

 

When employees are reimbursed for business travel in their company cars, HMRC will accept there is no taxable profit and no Class 1A national Insurance to pay.

 

Advisory fuel rates from 1 September 2016

 

Petrol/LPG

Engine size

Petrol – amount per mile (Jun 16 rate in brackets)

LPG – amount per mile

1400cc or less

11p (10p)

7p (7p)

1401cc to 2000cc

13p (13p)

9p (9p)

Over 2000cc

20p (20p)

13p (13p)

 

Diesel

Engine size

Diesel – amount per mile

1600cc or less

9p (9p)

1601cc to 2000cc

11p (10p)

Over 2000cc

13p (12p)

 

Hybrid cars are treated as either petrol or diesel cars for this purpose.

 

HMRC review rates quarterly on 1 March, 1 June, 1 September and 1 December.