HMRC Advisory Fuel Rates

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HMRC increases Advisory Fuel Rates for small diesel and LPG cars as fuel costs rise

HM Revenue and Customs (HMRC) has increased its mileage rates for small diesel and LPG engined cars in a series of changes to its new Advisory Fuel Rates in line with the rising cost of fuel across the UK.

Pump prices have reached three and a half year highs in recent weeks due to the rising price of oil on the world markets.

The increases have prompted a warning from the motoring organisation, the RAC, which said that petrol and diesel prices could soar towards all-time record levels due to the rising cost of oil.

The RAC said average prices had risen to 126.62p a litre for petrol and 129.41p for diesel, the highest seen since 2014. The organisation predicts a further 2p rise during the next few weeks after the cost of oil hit $80 a barrel for the first time since November 2014.

Under the new AFR rates, which are effective for the three months from June1, there are three changes: a 1p increase for LPG vehicles between 1,401cc and 2,000cc, and for LPG vehicles above 2,000cc, reversing the cuts of the previous quarterly review.

At the same time, the rate for diesel cars with an engine size of 1,600cc or less has increased by 1p, from 9p per mile to 10p. All other rates are unchanged.

The increases are relevant as the company car advisory fuel rates are used by organisations to reimburse drivers for fuel used in incurring business, rather than private mileage. Companies can use the old rates for up to one month from the date the new rates apply.

The company car mileage reimbursement rates are based on current petrol and diesel prices from the Department for Energy and Climate Change, with the LPG taken from the UK average price from the AA website in the previous month.

The new rates are as follows, and are effective from June 1, although employers can use the previous rates for up to one month from the date the new rates apply:

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

 

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

The previous rates can be used for another month from the date the new rates apply, were:

Engine size Petrol LPG
1400cc or less 11p 7p
1401cc to 2000cc 14p 8p
Over 2000cc 21p 13p
Engine size Diesel
1600cc or less 9p
1601cc to 2000cc 11p
Over 2000cc 13p

 

By |May 22nd, 2018|Categories: Driving, Fleet|Comments Off on HMRC Advisory Fuel Rates