CARS - 16.03.2015
AFRs fall sharply
Falling rates. After a long period of relative stability HMRC has cut its advisory fuel rates (AFRs) for company cars sharply from 1 March 2015 to reflect the fall in pump prices. However, employers can continue to use the old, more generous, AFRs until 31 March 2015. The table below shows the new AFRs with the old rates in brackets.
Private journeys. AFRs can be used to work out the cost of fuel for journeys in a company car. A tax charge can be avoided where:
- your business pays for all fuel put into a car or van and the employee concerned reimburses the cost of fuel used for non-business mileage
- an employee pays for all fuel used in their company car or van and you reimburse them for the business journeys.
| Engine size | Petrol p/mile | LPG p/mile | Diesel p/mile |
| Up to 1,400cc | 11p(13p) | 8p(9p) | - |
| Up to 1,600cc | - | - | 9p(11p) |
| 1,400cc to 2,000cc | 13p(16p) | 10p(11p) | - |
| 1,600cc to 2,000cc | - | - | 11p(13p) |
| Over 2,00cc | 20p(23p) | 14p(16p) | 14p(16p) |
New advisory fuel rates apply from 1 March 2015. Employees who reimburse their employers at these rates won’t be taxed on a benefit in kind for fuel they’ve used on private journeys in their company cars.
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