advisory fuel rates

The Advisory Fuels Rates are the amounts calculated by HMRC and should only be used for the purposes of:

  • reimbursing employees for business travel in their company cars;
  • setting rates that employees repay businesses for private fuel use on fuel cards;
  • calculating input VAT to be claimed on Mileage Allowance Payments.

The Advisory Fuel Rates change each year but the effective rates from 1 December 2017 are:

Engine size Petrol – amount per mile LPG – amount per mile
1400cc or less 11 pence 7 pence
1401cc to 2000cc 14 pence 9 pence
Over 2000cc 21 pence 14 pence
Engine size Diesel – amount per mile
1600cc or less 9 pence
1601cc to 2000cc 11 pence
Over 2000cc 13 pence

Hybrid cars are treated as either petrol or diesel cars for this purpose.

Mileage Allowance Payments vs Advisory Fuel Rates

Mileage allowance payments are higher because they reflect wear and tear, insurance and car maintenance, so are used when people use their personal vehicles for business purposes.  Advisory fuel rates relate to just fuel so are used where individuals have been provided with Company Cars and the business covers the cost of car maintenance and insurance.

Anita is a Chartered Accountant, turned blogger and creator of the ever popular free Go Self Employed Email Mini Course, which has been completed by hundreds of attendees all over the UK. Using her 10 years experience in accounting, tax and operations for Small Businesses, Anita is on a mission to make finance simple for the self employed, so they can stop stressing about tax & finances and focus on building profitable businesses which will give them the lifestyle they dream of.