New Advisory Fuel Rates For Employees Using a Company Car

Her Majesty's Revenue & Customs (HMRC) has released its latest Advisory Fuel Rates (AFRs) on 29th August 2019, these changes are as a result of cost of fuel changes over the last 3 months.

When do they come into effect?

These new rates are effective from 1st September 2019, until then businesses should use rates set out  on 29th May Advisory Fuel Rates (AFR) 1st June to 31st August 2019

Diesel Fuel Rates :

The diesel rate for a company car with an engine 1,400cc or less stays the same as does the rate for a diesel car with an engine over 2,000cc.

However, there has been a change for Diesel cars with an engine size from 1,601cc to 2,000cc, the rate decreases by 1p per mile (ppm), from 12 to 11ppm.  

Petrol Fuel Rates :

The AFR for a petrol company car with an engine of 1,400cc or less stays the same at 12ppm.

Petrol cars with an engine from 1,400-2,000cc falls by 1 pence per mile to 14 ppm.

And Petrol cars with an engine size over 2,000cc falls 21ppm.

Liquefied Petroleum Gas (LPG) Fuel Rates :

An LPG vehicle with an engine of 1,400cc or less will stay the same at 8ppm.

For LPG vehicles with an engine from 1,401-2,000cc the rate increases from 9ppm to 10ppm. 

LPG vehicles with an engine above 2,000cc will stay the same at 14ppm.   

Electric Car Fuel Rates :

The advisory electricity rate (AER) for plug-in cars remains unchanged at 4ppm.

Note : Electricity is not a fuel for car fuel benefit purposes.

Hybrid Car Fuel Rates :

Hybrid cars are treated as either petrol or diesel cars for the purpose of AFRs.

How Are These Rates Used?

These rates are to be applied when an employee is using a company car for business purposes, businesses can reimburse employees any rate up to the limit for business miles undertaken and no tax charge will be applied, this enables businesses to cover the cost of their Fleet drivers business mileage without any benefit in charge (BIK) being applied. 

Remember any employees using their own cars for businesses purposes have a different reimbursement level as Approved Mileage Allowance Payments (AMAP) can be applied, these can be higher values as they also reflect wear and tear and depreciation costs incurred by the employee.

If you would like any further information about how these changes may impact you or your business don't hesitate to call us on 0330 056 3331 to speak to one of our Strategic Fleet Consultants.