Advisory fuel rates for company cars

New company car advisory fuel rates have been published which took effect from 1 December 2015. The guidance states: ‘You can use the previous rates for up to one month from the date the new rates apply’. The rates only apply to employees using a company car.

The advisory fuel rates for journeys undertaken on or after 1 December 2015 are:

Engine sizePetrol
1400cc or less11p
1401cc - 2000cc13p
Over 2000cc20p
Engine sizePetrol
1400cc or less7p
1401cc - 2000cc9p
Over 2000cc13p
Engine sizePetrol
1400cc or less9p
1401cc - 2000cc11p
Over 2000cc13p

Please note that not all of the rates have been amended so care must be taken to apply the correct rate.

Other points to be aware of about the advisory fuel rates:

  • Employers do not need a dispensation to use these rates. Employees driving employer provided cars are not entitled to use these rates to claim tax relief if employers reimburse them at lower rates. Such claims should be based on the actual costs incurred.
  • The advisory rates are not binding where an employer can demonstrate that the cost of business travel in employer provided cars is higher than the guideline mileage rates. The higher cost would need to be agreed with HMRC under a dispensation.

If you would like to discuss your car policy, please contact us.

More info: GOV.UK AFR