HMRC advisory fuel rates for company car users from 1 March

HMRC has published the latest advisory fuel rates (AFR) for company car users, effective from 1 March 2020 cutting mileage rates for Diesel and Petrol vehicles with 2000cc or more by 1p per mile

The advisory fuel rates that apply from 1 March 2020 have decreased by 1p per mile for Diesel vehicles over 2000cc reflecting cuts in diesel prices over the last quarter, while the Petrol amount per mile for vehicles over 2000cc has been cut by 1p to 20p per mile. The previous rates, effective December 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 March 2020

Engine sizePetrol – amount per mileLPG – amount per mile
1400cc or less12p8p
1401cc to 2000cc14p10p
Over 2000cc20p14p

 

Engine sizeDiesel – amount per mile
1600cc or less9p
1601cc to 2000cc11p
Over 2000cc13p

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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