19th June 2015

Updated advisory rates for company car fuel

Employers who operate company car schemes should be aware that new advisory rates have been released applicable to journeys made on or after 1 June 2015.

Advisory fuel rates apply in relation to company vehicles where the employer either reimburses employees for any business travel in company cars, or where employees are required to repay any fuel costs associated with private use of the car.

Employers can choose to set rates which are different to the advisory rates.  However, if the rate paid for business use is no higher than the advisory rate (linked to engine size and type of fuel), HMRC will not regard this as taxable or liable to Class 1 national insurance contributions.

The new rates are as follows:-

Engine size Petrol – amount per mile        LPG – amount per mile
1400cc or less                12p                      8p

1401cc to


               14p                       9p
Over 2000cc                21p                      14p

Engine size

Diesel – amount per mile
1600cc or less           10p
1601cc to 2000cc           12p
Over 2000cc           14p

The old rates can still be used by employers during the month of June.

Jack Boyle
Senior Solicitor – Employment Law

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