What are HMRC Advisory Fuel Rates?
Advisory Fuels Rates (AFRs) are the rates set by government for reimbursing, or being reimbursed for, fuel costs incurred by drivers using company cars. The rates can only be used for fuel costs associated with company cars. You can use them to either repay employees for fuel they have used when using a company car for business purposes, or to calculate what an employee owes you for fuel paid for by the business and used for private travel in a company car.
Rates are calculated based on fuel prices and adjusted by mile per gallon figures. You can use alternative rates without incurring a tax liability if you can demonstrate that the rate is valid – for example, the real cost of business travel is higher or lower than the advisory fuel rates.
HMRC review advisory fuel rates quarterly, details of current rates can be found on the government website by clicking here. Following a rate change, previous rates can be used for up to 1 month from the date the new rates apply.
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