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This publication is available at https://www.gov.uk/government/publications/advisory-fuel-rates/when-you-can-use-advisory-fuel-rates
1. Current rates
Current rates start from 1 December 2017.
2. When you can use the mileage rates
The rates only apply when you either:
- reimburse employees for business travel in their company cars
- require employees to repay the cost of fuel used for private travel
You must not use these rates in any other circumstances.
2.1 Reimburse employees for business travel in their company cars
If you pay a rate per mile for business travel no higher than the Advisory Fuel Rates, for the particular engine size and fuel type, HM Revenue and Customs (HMRC) will accept there’s no taxable profit and no Class 1A National Insurance to pay.
You can use your own rates which better reflect your circumstances if, for example, your cars are more fuel efficient, or if the cost of business travel is higher than the guideline rates.
If you pay rates that are higher than the advisory rates and can’t demonstrate the fuel cost per mile is higher, there’s no fuel benefit charge if the mileage payments are solely for miles of business travel. Instead, you’ll have to treat any excess as taxable profit and as earnings for Class 1 National Insurance purposes.
2.2 Require employees to repay the cost of fuel used for private travel
If you’ve correctly recorded all miles of private travel and used the correct rate (or anything higher) to work out the cost of fuel used for private travel that the employee must repay to you, HMRC will accept there’s no fuel benefit charge.
The advisory rates won’t be binding where you can demonstrate that employees cover the full cost of private fuel by repaying at a lower rate per mile.
3. How rates are calculated
Rates are calculated based on fuel prices and adjusted miles per gallon figures.
4. Previous rates
Previous rates are available to check from 1 March 2013.