New company car advisory fuel rates – take effect 1 March 2018

HM Revenue & Customs (HMRC) has issued the new Advisory Fuel Rates for company vehicles per mile as follows:

ENGINE SIZE Petrol
1400cc or less 11p
1401cc – 2000cc 14p
over 2000cc 22p
ENGINE SIZE LPG
1400cc or less 7p
1401 cc – 2000cc 8p
Over 2000cc 13p
ENGINE SIZE Diesel
1600cc or less 9p
1601cc – 2000cc 11p
Over 2000cc 13p

These Advisory Fuel Rates take effect from 1 March 2018. You can use the previous rates for up to 1 month from the date the new rates apply. Please note that not all of the rates have been amended so care must be taken to apply the correct rate.

If an employer provides an employee with a company car but does not pay for the fuel for that vehicle, these rates can be used to reimburse the employee for the business miles travelled in the vehicle.

The rates for employees using their own cars for business journeys are as follows:

MILEAGE Rate
First 10,000 business miles per annum 45p
Excess over 10,000 25p
Each passenger making the same trip 5p

VAT Registered Businesses

Regardless of whether an employee is being reimbursed for business mileage in a company car or a private car, VAT is only claimable on the fuel element and is calculated as follows:

ENGINE SIZE Petrol
1400cc or less 11p x 1/6
1401cc – 2000cc 14p x 1/6
over 2000cc 22p x 1/6
ENGINE SIZE LPG
1400cc or less 7p x 1/6
1401cc – 2000cc 8p x 1/6
Over 2000cc 13p x 1/6
ENGINE SIZE Diesel
1600cc or less 9p x 1/6
1601cc – 2000cc 11p x 1/6
Over 2000cc 13p x 1/6

Please be aware that an invoice should always be retained to support a claim for input VAT.

If you have any queries regarding this matter please contact Liz or Lisa on 01246 274121.

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