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Falling HMRC Fuel Rates – are your claims right?

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The rates only apply when you either:

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

If you pay a rate per mile for business travel no higher than the AFR, for the particular engine size and fuel type, HM Revenue and Customs (HMRC) will accept there is no taxable profit and no Class 1A National Insurance to pay.

You can use your own rates which better reflect your circumstances if, for example, your cars are more fuel efficient, or if the cost of business travel is higher than the guideline rates.

Advisory Fuel Rates from 1 March 2015

These rates applied from 1 March 2015. You can use the previous rates for up to 1 month from the date the new rates apply.

Engine size Petrol – amount per mile LPG – amount per mile
1400cc or less 11p 8p
1401cc to 2000cc 13p 10p
Over 2000cc 20p 14p
Engine size Diesel – amount per mile
1600cc or less 9p
1601cc to 2000cc 11p
Over 2000cc 14p

 

COMPANY car mileage rates have been slashed by up to 18% as HMRC cut the tax allowance across all six of the petrol and diesel categories in response to continuing fuel price falls.

Hardest hit by the rates, known as advisory fuel rates (AFR), are drivers of company cars with petrol engines greater than 1,401cc which have suffered a 3p cut in rates applicable from 1 March.

Business Car Manager

steve@bicknells.net


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