Advisory fuel rates from 1 December 2016

Advisory Fuel Rates December 2016: Key Information for Employers

Effective from 1 December 2016, HM Revenue and Customs (HMRC) updated the Advisory Fuel Rates (AFRs) for company cars. These rates are essential for employers to accurately reimburse employees for business travel and to calculate the fuel benefit charge for private use of company vehicles.

Updated Rates from 1 December 2016

The revised AFRs, applicable from 1 December 2016, are as follows:

Petrol:

  • Up to 1400cc: 11p per mile
  • 1401cc to 2000cc: 14p per mile
  • Over 2000cc: 21p per mile

Diesel:

  • Up to 1600cc: 9p per mile
  • 1601cc to 2000cc: 11p per mile
  • Over 2000cc: 13p per mile

LPG:

  • Up to 1400cc: 7p per mile
  • 1401cc to 2000cc: 9p per mile
  • Over 2000cc: 13p per mile

These rates are designed to reflect fuel costs and are reviewed quarterly by HMRC. Employers can use the previous rates for up to one month from the date of change.

gov.uk

Application of Advisory Fuel Rates

Employers should use these AFRs when reimbursing employees for business travel in company cars. If the reimbursement rate does not exceed the AFR, there is no taxable profit and no Class 1A National Insurance to pay. However, if the rate paid is higher than the AFR and the employer cannot demonstrate that the fuel cost per mile is higher, the excess is treated as taxable profit and is subject to Class 1 National Insurance.

gov.uk

How We Can Help

At Lewis Brownlee, we understand the complexities employers face regarding company car fuel reimbursements. Our team can assist you in implementing the correct Advisory Fuel Rates December 2016 and ensure compliance with HMRC guidelines. For personalized advice, please contact us.

Staying informed about the Advisory Fuel Rates December 2016 is crucial for employers to manage company car expenses accurately and remain compliant with tax regulations.