FUEL prices have soared since the last review of business mileage rates applied since the beginning of January.
There was little change then in the rates, so the latest update for company car drivers from the taxman effective effective 01 March will be small change.
HMRC changes published AFRs
HMRC has most unusually changed one rate since first posting the latest AFR list. From 27 February:
- Petrol car AFR rates increase to 22p per mile
But after originally listing a one penny per mile REDUCTION in the rate for petrol cars over 2 litres, from 21p to 20p, it has not only reversed that but increased it to 22p.
The new company car business mileage rates, known as the HMRC advisory fuel rates (AFRs), kick in from March 1 2017.
So who are the winners?
- Petrol cars with engines over 2000cc get 1p per mile more
- LPG cars with engines over 2000cc get 1p per mile more.
If you drive a hybrid company car, then the business mileage rates reflect the appropriate petrol or diesel AFRs; again the new rates are effective from March 1, 2017.
Company car business mileage rates are used to claim back business mileage in company cars or to repay private mileage if fuel is provided by the company so to avoid car fuel benefit tax.
HMRC reviews the company car business mileage rates every quarter, basing its calculation this time on average fuel prices on one day in February from the Department of Energy and Climate Change and LPG average price quoted on the AA website.
The updated company car business mileage rates are listed below
Petrol: Company car mileage rates from 01 March 2017
- Engine size 1400cc or less: 11p – unchanged
- 1401cc to 2000cc: 14p – unchanged
- Over 2000cc: 22p – 1p increase
Diesel: Company car mileage rates from 01 March 2017
- Engine size 1600cc or less: 9p – unchanged
- 1601cc to 2000cc: 11p – unchanged
- Over 2000cc: 13p – unchanged
Hybrid fuelled company car mileage rates
- Drivers of petrol/electric hybrid company cars should use the petrol rates.
- Drivers of diesel/electric hybrid cars should use the diesel rates.
LPG fuelled company car mileage rates from 01 March 2017
- Engine size 1400cc or less: 7p – unchanged;
- 1401cc to 2000cc: 9p – unchanged;
- Over 2000cc: 14p – 1p increase
What about business mileage rates for private cars on business?
The Advisory Fuel Rate company car business mileage rates are to be used by company car drivers and should not be confused with Approved Mileage Allowance Payments, known as AMAPs.
These AMAP payments are the tax-free pence-per-mile rates applicable only when drivers use their private cars for business purposes.