Advisory fuel rates for company cars

New company car advisory fuel rates have been published which took effect from 1 March 2016. The guidance states: 'You can use the previous rates for up to one month from the date the new rates apply'. The rates only apply to employees using a company car.

The advisory fuel rates for journeys undertaken on or after 1 March 2016 are:

Engine size Petrol
1400cc or less 10p
1401cc - 2000cc 12p
Over 2000cc 19p
Engine size LPG    
1400cc or less 7p
1401cc - 2000cc 8p
Over 2000cc 13p
Engine size Diesel
1600cc or less 8p
1601cc - 2000cc 10p
Over 2000cc 11p

Other points to be aware of about the advisory fuel rates:

  • Employees driving employer provided cars are not entitled to use these rates to claim tax relief if employers reimburse them at lower rates. Such claims should be based on the actual costs incurred.
  • The advisory rates are not binding where an employer can demonstrate that the cost of business travel in employer provided cars is higher than the guideline mileage rates. The higher cost would need to be agreed with HMRC.

If you would like to discuss your car policy, please contact us.

Internet link: GOV.UK AFR

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