HMRC has just announced its latest quarterly review of advisory fuel rates (AFR). They take effect from March 1 2014.
Company car drivers and business car managers should use these pence per mile rates when claiming expenses for business mileage in company cars.
In fact there is only one minor change to the rates announced last quarter. Petrol and diesel rates remain the same but drivers of LPG fueled cars over 2 litres can claim an extra penny per mile – up from 16 to 17ppm.
Hybrids are treated the same as the equivalent petrol or diesel model.
Rates are calculated using up-to-date fuel prices (as they stood on February 17) and an average mpg figure for the engine sizes listed.
Advisory Fuel Rates or AFRs should be used by company car drivers to avoid paying tax on free fuel for business mileage. The rates should also be used by company car drivers who don’t get free fuel as part of their remuneration.
Rates are revised quarterly so keep an eye on this site for the next update which will take effect on June 1.
The new company car business mileage rates are listed below.
Petrol: Company car business mileage Advisory Fuel Rates from 01 March 2014
- Engine size 1400cc or less: 14p – unchanged
- 1401cc to 2000cc: 16p – unchanged
- Over 2000cc: 24p – unchanged
Diesel: Company car business mileage Advisory Fuel Rates from 01 March 2014
- Engine size 1600cc or less: 12p – unchanged
- 1601cc to 2000cc: 14p – unchanged
- Over 2000cc: 17p – unchanged
