HMRC Advisory Fuel Rates September 2019

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The latest Advisory Fuel Rates (AFRs) have recently been published by the HMRC, and take effect from the 1st September 2019.

What are Advisory Fuel Rates?

The HMRC Advisory Fuel Rates are the recommended reimbursement rates, for employees reclaiming business travel, usually in company vehicles. They are also known as “HMRC company car mileage rates”. These Advisory Fuel Rates are also used to calculate the fuel portion of a mileage claim. This is important when claiming VAT on mileage expenses. This is explained in more detail below.

The Advisory Fuel Rate is based on the engine size and fuel type of your car. To illustrate, the highest rate is for cars with large petrol engines (21 pence per mile), the lowest rate is for cars with small LPG engines (8 pence per mile).

HMRC update the Advisory Fuel Rates quarterly to take account of changes in fuel prices. The latest rates are shown below and are valid from the 1st September 2019.

Advisory Fuel Rates – from 1st September 2019

Engine size Petrol – amount per mile LPG – amount per mile
1400cc or less 12 pence 8 pence
1401cc to 2000cc 14 pence 10 pence
Over 2000cc 21 pence 14 pence

 

Engine size Diesel – amount per mile
1600cc or less 10 pence
1601cc to 2000cc 11 pence
Over 2000cc 14 pence

Hybrid Fuelled Cars

  • Drivers of petrol/electric hybrid cars can use the petrol rates
  • Drivers of diesel/electric hybrid cars can use the diesel rates

Advisory Electricity Rate

As for the last three quarters, the Advisory Electric Rate (AER), for pure electric cars, is 4ppm. This is free of tax and National Insurance.

The use of Advisory Fuel Rates in calculating the VAT on mileage expenses

The HMRC Advisory Fuel Rate can also used to calculate the fuel portion of your mileage claim. Therefore, this is important if you drive your own car for business and your business (or employer) claims VAT on your mileage expenses.

The formula for calculating the VAT on mileage expenses using the Advisory Fuel Rate is:

Fuel portion advisory fuel rate x business miles claimed
VAT = fuel portion / 6
Hence:
VAT on mileage = (advisory fuel rate x business miles claimed) / 6

If you want to find out more about claiming VAT on your mileage expenses please see our blog VAT on mileage expenses – how to claim.

Finally, the changes to the current Advisory Fuel Rates are:

  • Petrol engine 1401cc to 2000cc, decreased by 1p per mile to 14p
  • Petrol engine over 2000cc, decreased by 1p per mile to 21p
  • LPG engine 1401cc to 2000cc, increased by 1p per mile to 10p
  • Diesel engine 1601cc to 2000cc, decreased by 1p per mile to 11p

N.B. The Advisory Fuel Rates for earlier periods can be found at www.gov.uk

Tripcatcher users – these rates are updated for you so there is nothing for you to do.

There is a 14 day free trial so why not try Tripcatcher now !

Suzanne Fordham

About the Author

Suzanne Fordham is a co-founder of Tripcatcher (easy to use mileage expense software) who loves helping and talking to clients.