Advisory fuel rate for company cars

fuel

These are the suggested reimbursement rates for employees’ private mileage using their company car from 1 September 2020. Where there has been a change the previous rate is shown in brackets.

Engine Size Petrol Diesel LPG
1400cc or less 10p 7p (6p)
1600cc or less 8p
1401cc to 2000cc 12p 8p (9p)
1601 to 2000cc 10p (9p)
Over 2000cc 17p 12p 12p (11p)

You can continue to use the previous rates for up to 1 month from the date the new rates apply.  For wholly electric cars there is a 4p advisory rate. However, for hybrid cars use the equivalent petrol or diesel rate.

Thus, where an employee is considering reimbursing their employer for private use to avoid a taxable benefit, it may be beneficial to compute the actual cost of private fuel rather than use the scale rate.

Our experts at Beavis Morgan can ensure your tax affairs are as efficient as possible to fit your circumstances. In addition, we can look ahead to retirement and inheritance tax planning.

For more information and to discuss your tax affairs in further detail, contact Barrie Dunning or your usual Beavis Morgan Partner.

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