HMRC advisory fuel rates for company car users from 1 December

HMRC has published the latest advisory fuel rates (AFR) for company car users, effective from 1 December 2019 cutting standard 1600cc minus mileage rates by 1p per mile to reflect lower fuel costs

The advisory fuel rates apply from 1 December 2019 have decreased by 1p per mile for vehicles under 1600cc reflecting cuts in diesel prices over the last quarter, while LPG rate for 1400cc and below vehicles has been cut by 1p to 9p per mile. The previous rates, effective September 2019, 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.

The advisory electricity rate for fully electric cars is unchanged at 4p per mile. Electricity is not a fuel for car fuel benefit purposes.

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 December 2019

Engine size Petrol – amount per mile LPG – amount per mile
1400cc or less 12p 8p
1401cc to 2000cc 14p 9p
Over 2000cc 21p 14p

 

Engine size Diesel – amount per mile
1600cc or less 9p
1601cc to 2000cc 11p
Over 2000cc 14p

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

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

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