HM Revenue & Customs (HMRC) has updated its advisory fuel rates, applying to all journeys on or after 1 September 2014.
HMRC-approved advisory fuel rates apply where employers reimburse employees for business travel in their company cars, and where employees reimburse the cost of fuel used for private travel in a company car. There is no fuel benefit charge if the advisory rates are used.
The figures quoted will also be accepted by HMRC for VAT purposes, though employers are reminded to retain receipts. The new rates per mile are:
| Engine size | Petrol | Diesel | LPG |
| 1400cc or less | 14p | 9p | |
| 1401cc to 2000cc | 16p | 11p | |
| 1600cc or less | 11p | ||
| 1601cc to 2000cc | 13p | ||
| Over 2000cc | 24p | 17p | 16p |
Hybrid cars are treated as either petrol or diesel cars for this purpose.
The rates are reviewed four times a year and any changes take effect at the beginning of each calendar quarter, on 1 March, 1 June, 1 September and 1 December.
They are published on HMRC’s website shortly before the date of change. For one month from the date of change, employers are able to use either the previous or new rates.
As HMRC accepts the figures for VAT purposes, it’s good to know that we offer can provide expert advice on a range of VAT issues. It can be complicated to calculate, so please do not hesitate to contact us if you have any queries relating this or any other VAT matter.
Link: Additional HMRC information