Advisory Fuel Rates from 1 September 2019

HMRC has published the Advisory Fuel Rates from 1 September 2019, which apply to company car drivers for mileage reimbursement. These rates are reviewed quarterly to reflect fuel price changes and vehicle efficiencies.

Understanding these rates is essential for businesses and employees using company cars to ensure compliance and accurate expense claims.

What Are Advisory Fuel Rates?

Advisory Fuel Rates (AFRs) are the HMRC-approved rates used by businesses to reimburse employees for fuel costs in company cars. These rates apply when:

  • Employers reimburse employees for business travel in company cars
  • Employees repay employers for private mileage to avoid a fuel benefit charge

The AFRs vary depending on the engine size and fuel type of the vehicle.

When Do the New Rates Apply?

The new rates from 1 September 2019 must be used for company car mileage claims. However, businesses can continue using the previous rates until 30 September 2019 to allow for a transition period.

The updated rates are published on the government website and should be reviewed to ensure compliance with HMRC guidelines. But, especially for you, we have summarised as follows:

Why Are Advisory Fuel Rates Important?

Using the correct AFR ensures:

  • Accurate reimbursement for employees using company cars for business travel
  • Avoidance of tax issues related to under- or over-reimbursing fuel expenses
  • Compliance with HMRC guidelines to prevent penalties

If an employer reimburses at a rate higher than the AFR without proper evidence, the excess may be treated as a taxable benefit.

How We Can Help

At Lewis Brownlee, we provide expert guidance on company car taxation, and mileage reimbursements. So, for advice on how these changes affect you, visit our contact page to speak with a member of our team. Also, do feel free to take us up on one of our free, introductory meetings. These are designed to let you find out what we do and how we do it before you commit. So, you have nothing to lose and potentially everything to gain!