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These are mileage rates which employers can use to work out how much to reimburse employees who use company cars for business journeys, but who have paid for the fuel used on those journeys out of their own pocket.

The advisory fuel rates are reviewed by HMRC every quarter, with the new rates taking effect from the first of June, September, December and March. In view of the recent increases in the price of road fuel you would expect all the advisory fuel rates to rise, but they haven’t. The pence per mile rates for the current quarter are:

Engine size Petrol LPG
1400cc or less 11p 7p
1401cc to 2000cc 14p 9p
Over 2000cc 22p 14p

Engine size Diesel
1600cc or less 10p
1601cc to 2000cc 11p
Over 2000cc 13p

HMRC can’t require you to use these advisory rates. If the fuel costs in your area are much higher than the UK average, or your company vehicles have low fuel efficiency, your business can use its own mileage rates based on the actual fuel costs of your company vehicles.

When an employee uses their own vehicle for a business journey, you can reimburse them tax free using mileage rates of 45p per mile for any size of car for the first 10,000 business miles driven in a year, and 25p per mile for subsequent journeys. These mileage rates for personally owned cars haven’t changed since 2011.

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Clarke Nicklin House, Brooks Drive, Cheadle Royal Business Park, Cheadle, Cheshire, SK8 3TD. Registered Number OC309225.
The firm is registered to carry on audit work in the UK & Ireland. Details about our audit registration can be viewed at www.auditregister.org.uk under reference number C001178544. The professional rules applicable are the Audit Regulations and Guidance which can be found at www.icaew.com/regulations, and the International Standards on Auditing (UK and Ireland) which can be found at www.frc.org.uk/apb/publications/isa.cfm.