New advisory mileage rates now in force

HMRC has updated its advisory mileage rates that 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 rates from 1 September 2013

Advisory fuel only mileage rates
  Rates per mile
Engine Capacity Petrol LPG
Up to 1400cc 15p 10p
1401cc – 2000cc 18p 11p
Over 2000cc 26p 16p
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.

Past advisory fuel rates can be found here for your comparison.

Please contact us if you need help calculating mileage allowances.