business mileage rates
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fleet-alliance sponsorRISING fuel prices have been recognised with some small rises in HMRC’s advisory fuel rates (AFRs), taking them back to where they were before September reductions.

With prices now around £1.20/litre and more – 10p up on earlier in the year – the latest update for company car drivers from the taxman effective 01 December, sees 1p/mile rises in four capacity classes for petrol, diesel and LPG – and the equivalent engine size petrol and diesel electric hybrids.

The one change for petrol cars 1401cc to 2 litres, returns to 14p from 13p per mile, while for diesels the rise is for cars over 2 litres, back up from 12p to 13p per mile. LPG mileage rates rise 1p for both 1401-2000cc (to 9p) and over 2000cc (to 14p).

The new company car business mileage rates, known as the HMRC advisory fuel rates (AFRs), kick in from December 1 2017.

You can continue to claim the old rates for up to one month but that would make no sense!

So who are the winners?

  • Petrol and petrol hybrid cars with engines 1401-2000cc get 1p per mile more
  • LPG cars with engines 1401-2000cc get 1p per mile more
  • Diesel and diesel hybrid 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 December 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 this time on one day in November 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

Business driver at the wheel of his company car

 

Petrol: Company car mileage rates from 01 December 2017

  • Engine size 1400cc or less: 11p – unchanged
  • 1401cc to 2000cc: 14p – 1p increase
  • Over 2000cc: 21p – unchanged

 

Diesel: Company car mileage rates from 01 December 2017

  • Engine size 1600cc or less: 9p – unchanged
  • 1601cc to 2000cc: 11p – unchanged
  • Over 2000cc: 13p – 1p increase

 

Hybrid powered 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 December 2017

  • Engine size 1400cc or less: 7p – unchanged;
  • 1401cc to 2000cc: 9p – 1p increase;
  • 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.

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