HMRC has published updated advisory fuel rates (AFRs) which will apply from 1 December 2017, alongside guidance on when to use them and how the rates are calculated.
AFRs are the rates employers can use to reimburse employees who pay to put petrol in their company cars when using them for business. The rates have not changed greatly but a few of them have gone down.
The rates depend on engine size and are different for petrol, diesel and LPG. Hybrid cars are treated as either petrol or diesel cars for this purpose.
These rates apply from 1 December 2017 until further notice. For one month from the date of change, employers may use either the previous or the current rates.
Petrol - amount per mile
LPG - amount per mile
1400cc or less
1401cc to 2000cc
Diesel - amount per mile
1600cc or less
1601cc to 2000cc
Advisory fuel rates are intended to reflect actual average fuel costs and are updated quarterly. They can be used by employers who:
Where employers pay a rate per mile for business travel no higher than the advisory fuel rates for the particular engine size and fuel type, HMRC accepts that there is no taxable profit and no Class 1A NIC to pay.