HMRC’s Advisory Fuel Rates (AFR) can be used by employers in two situations, both applying where the employee has a company car:

  • To reimburse employees for business travel, or
  • To calculate the amount that employees should repay for any private use

The AFRs are reviewed quarterly at the start of March, June, September and December. When new rates are announced, employers can choose to implement the new rates immediately or use the old rate for up to one further month.  The pence per mile rates effective 01 September 2016 are shown in the table below.  This also shows the movement of rates in the last 12 months and highlights in red the changes from June:

Petrol and LPG

Fuel Date Engine Size
1400cc or less 1401 to 2000cc Over 2000cc
Petrol and petrol-hybrid  from 1/09/15 11p 14p 21p
from 1/12/15 11p 13p 20p
from 1/03/16 10p 12p 19p
from 1/06/16 10p 13p 20p
from 1/09/16 11p 13p 20p
LPG  from 1/09/15 7p 9p 14p
from 1/12/15 7p 9p 13p
from 1/03/16 7p 8p 13p
from 1/06/16 7p 9p 13p
from 1/09/16 7p 9p 13p

Diesel

  Date Engine Size
1600cc or less 1601 to 2000cc Over 2000cc
Diesel  from 1/09/15 9p 11p 13p
from 1/12/15 9p 11p 13p
from 1/03/16 8p 10p 11p
from 1/06/16 9p 10p 12p
from 1/09/16 9p 11p 13p

 

HMRC documents the way that these rates are calculated. They are based on ‘Applied Miles per Gallon’ for different engine sizes, reduced by 15% to take into account real driving conditions.  The fuel prices used are:

  • petrol – 109.3p per litre (496.80p per gallon)
  • diesel – 111.00p per litre (504.70p per gallon)
  • LPG – 57.50p per litre (261.40p per gallon)

The above information is contained on the Gov.UK Website in four separate places:

  • ‘Current rates’
  • ‘When you can use AFRs’
  • ‘How AFR rates are calculated’
  • ‘Previous rates’

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