AFRs used to claim on company car mileage
AFRs are used to reimburse mileage undertaken in a company car
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ADVISORY Fuel Rates are a method of paying – or reimbursing – expenditure on fuel without incurring fuel benefit tax.

Often abbreviated to AFRs, Advisory Fuel Rates are used by company car drivers.

There are two instances where AFRs are used.

One can be to repay private mileage incurred in a company car where the employer pays for all the fuel, usually by a fuel card.

The second, when the company car driver pays for all the fuel, to reclaim the cost of business mileage.

In both instances, it’s important that correct records are kept.

How are AFRs calculated?

HMRC calculates AFRs by using a combination of average fuel prices, a calculation of real-world mpgs achieved by engine size and fuel type to arrive at a pence per mile figure. For more on how AFRs are calculated, read HMRC’s How Advisory Fuel Are Calculated.

There are different AFR rates for petrol, diesel and LPG company cars. Petrol-electric hybrids, or diesel-electric hybrids use the appropriate petrol or diesel rates.

Currently there are no AFR rates for fully electric cars or plug-in electric vehicles (PHEVs).

AFRs are reviewed every quarter by HMRC on March 01; June 01; September 01; and December 01. The previous quarter’s rates can be used for one month after the new rates are set, whether higher or lower.

To view the current AFR rates click here.

Pool cars and AFRs

AFRs do not relate to pool cars. Pool cars by definition are there for business use only. Therefore the employer should cover the cost of fuel incurred in a pool car.

 

 

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