Company cars: New advisory fuel rates

New advisory mileage rates applicable from 1 September 2012 have been published by HMRC.

Advisory fuel rates allow businesses to reimburse employees for work related travel, or when employees are required to repay the cost of fuel used for private travel, in company cars.

Businesses are able to reclaim the VAT element on fuel mileage allowances providing they are close to HMRC’s own set fuel mileage allowance rates below.

Advisory fuel only mileage rates
  Rates per mile
Engine Capacity Petrol LPG
Up to 1400cc 15p 10p
1401cc – 2000cc 18p 12p
Over 2000cc 26p 17p
Engine Capacity Diesel  
1600cc or less 12p  
1601cc-2000cc 15p  
Over 2000cc 18p  

The rates are reviewed four times during the tax year any changes come into effect at the beginning of each quarter on 1 March, 1 June, 1 September and 1 December.

Employers may continue to use either the previous or new current rates for one month after the date of change. 

Please contact us if you need help calculating mileage allowances.