Advisory fuel rates
These are mileage rates which employers can use to work out how much to reimburse employees who use company cars for business journeys, but who have paid for the fuel used on those journeys out of their own pocket.
The advisory fuel rates are reviewed by HMRC every quarter, with the new rates taking effect from the first of June, September, December and March. In view of the recent increases in the price of road fuel you would expect all the advisory fuel rates to rise, but they haven’t. The pence per mile rates for the current quarter are:
| Engine size | Petrol | LPG |
|---|---|---|
| 1400cc or less | 11p | 7p |
| 1401cc to 2000cc | 14p | 9p |
| Over 2000cc | 22p | 14p |
| Engine size | Diesel | |
| 1600cc or less | 10p | |
| 1601cc to 2000cc | 11p | |
| Over 2000cc | 13p | |
HMRC can’t require you to use these advisory rates. If the fuel costs in your area are much higher than the UK average, or your company vehicles have low fuel efficiency, your business can use its own mileage rates based on the actual fuel costs of your company vehicles.
When an employee uses their own vehicle for a business journey, you can reimburse them tax free using mileage rates of 45p per mile for any size of car for the first 10,000 business miles driven in a year, and 25p per mile for subsequent journeys. These mileage rates for personally owned cars haven’t changed since 2011.