HM Revenue and Customs (HMRC) has updated the Advisory Fuel Rates (AFRs) which come into effect on 1 December 2020, for company car drivers requiring fuel costs from their employer. However, you can use the previous AFRs for up to one month from the date of the new rates.\u00a0<\/p>\n
For vehicles up to 1,400cc engine (10ppm) plus over 2,000cc (17ppm), the AFR pence per mile (ppm) petrol rates are the same. However, the ppm reduces by one for those with engine sizes from 1,400-2,000cc.<\/p>\n
The AFRs for diesel and Liquefied Petroleum Gas (LPG) powered vehicles are the same, but the new AFRs for petrol cars are as follows:<\/p>\n
Engine size \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Petrol – rate per mile \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 LPG – rate per mile<\/strong><\/p>\n 1400cc or less \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 10 pence \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 7 pence<\/p>\n 1401cc to 2000cc \u00a0\u00a0\u00a0\u00a0\u00a0 11 pence \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 8 pence<\/p>\n Over 2000cc \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 17 pence \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 12 pence<\/p>\n Engine size \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Diesel – rate per mile<\/strong><\/p>\n 1600cc or less \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 8 pence<\/p>\n 1601cc to 2000cc\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 10 pence<\/p>\n Over 2000cc \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 12 pence<\/p>\n When the mileage rates apply:<\/strong><\/p>\n These AFRs only apply to employees who utilise a company car. Employers can use the rates if they require employees to repay the cost of fuel used for private travel, or need to reimburse employees for business-related travel using a company car.<\/p>\n These rates do not apply to any other circumstances.<\/p>\n Employees repaying the cost of fuel<\/strong><\/p>\n If you record all private travel mileage and use the correct rate (or higher) to work out how much your employees must compensate you for fuel use, then there will be no fuel benefit charge.<\/p>\n If you can demonstrate that your employees can cover the full cost of private fuel, by repaying at a lower mileage rate, you do not need to utilise the AFRs.<\/p>\n Reimbursing employees<\/strong><\/p>\n There will be no taxable profit and no Class 1A National Insurance (NI) to pay if the mileage rate you pay is no higher than the AFRs for the engine size plus fuel type of the company car.<\/p>\n For more fuel-efficient cars, or if the price of business travel is higher than the AFRs, use your charges to reflect your circumstance.<\/p>\n If you pay rates that are more expensive than the AFRs although cannot show the fuel cost per mile is higher, there will be no fuel benefit charge if the mileage fees are solely for company travel. However, any excess will need treating as taxable profit plus earnings for Class 1 NI purposes.<\/p>\n Hybrid cars<\/strong><\/p>\n HMRC treats hybrid cars as either diesel or petrol cars for AFRs.<\/p>\n Electric cars <\/strong><\/p>\n The advisory electricity rate for fully electric cars is four pence per mile.<\/p>\n For more information or advice on AFRs, contact our expert team today.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":" HM Revenue and Customs (HMRC) has updated the Advisory Fuel Rates (AFRs) which come into effect on 1 December 2020, for company car drivers requiring fuel costs from their employer. However, you can use the previous AFRs for up to one month from the date of the new rates.\u00a0<\/p>\n","protected":false},"author":2,"featured_media":3843,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24,30,56,31,60,82,28],"tags":[],"_links":{"self":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/3841"}],"collection":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=3841"}],"version-history":[{"count":1,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/3841\/revisions"}],"predecessor-version":[{"id":3842,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/3841\/revisions\/3842"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/media\/3843"}],"wp:attachment":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=3841"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=3841"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=3841"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}