New advisory fuel rates published

Advisory fuel rates are intended to reflect actual average fuel costs and are updated quarterly. The rates can be used by employers who reimburse employees for business travel in their company cars or where employees are required to repay the cost of fuel used for private travel. HMRC accepts there is no taxable profit and no Class 1A National Insurance on reimbursed travel expenses where employers pay a rate per mile for business travel no higher than the published advisory fuel rates.

The latest advisory fuel rates became effective on 01 December 2019. Fuel rates are reviewed four times a year with changes taking effect on 01 March, 01 June, 01 September and 01 December. You can use the previous rates for up to 1 month from the date the new rates apply.

The new rates are as follows:

Engine size               Petrol – amount per mile               LPG – amount per mile
1400cc or less                    2p                                                       8p
1401cc to 2000cc             14p                                                     9p
Over 2000cc                      21p                                                      14p

 

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

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

Advisory Electricity Rate

HMRC accepts that if you pay up to 4p per mile when reimbursing your employees for business travel in a fully electric company car there is no profit. While electricity is not considered a fuel for tax and NICs purposes, the Advisory Electricity Rate is now published quarterly alongside the other advisory fuel rates.

 

 

 

Posted by Cassey Nixon on

18th December 2019

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