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You will need Advisory Fuel Rates to avoid paying car fuel benefit tax

IS YOUR company car an ultra low emission vehicle (ULEV), such as a hybrid or plug-in hybrid, but you don’t know what fuel reimbursement rates to use?

What you need are the Advisory Fuel Rates, (AFR).

These are provided by the HMRC and provide an average cost per mile, depending on the engine size and fuel type of the car.

As an employee, you can use these Advisory Fuel Rates to pay for private mileage incurred in your company car where your employer pays for the cost of fuel in your car. This way, you avoid paying the expensive car fuel benefit tax.

Alternatively, if you pay the cost of your fuel, you can recharge your company for the business miles incurred in your company car using these AFR rates.

If you have a petrol-hybrid car, you can use AFR petrol rates; if you have a diesel-hybrid car, you can use AFR diesel rates.

Current discussions are ongoing with HMRC about whether there should be separate AFRs for plug-in hybrid vehicles.

Although HMRC does not classify electricity as a fuel, its has finally published fully electric car business mileage rates (from September 01, 2018).  Click here for the latest rates.

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