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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