New fuel mileage rates for company car drivers

Company Fleet 

The fuel rates for business drivers in company cars has changed from the beginning of December.

The new rates - called the Advisory Fuel Rates (AFRs) and issued by HMRC - can be used to reimburse drivers for business mileage undertaken in their company cars.

Or, where all fuel is supplied by the company, to reimburse the business for private mileage.

Using the AFRs ensures drivers are not liable for fuel benefit tax.

However, drivers looking for an uplift in the rates will be disappointed - they stay the same as for the previous three months, apart from a drop of 1p for petrol engines between 1,401cc and 2,000cc.

The current rates are below.

Petrol AFR rates from December 2020

1400cc or less - 10 pence

1401cc to 2000cc - 11 pence (minus 1p)

Over 2000cc - 17 pence

Diesel AFR rates from December 2020

1600cc or less - 8 pence

1601cc to 2000cc - 10 pence

Over 2000cc - 12 pence

For drivers of electric vehicles, the Advisory Electricity Rate is 4p per mile. If you drive a hybrid or plug-in hybrid vehicle, you should use the appropriate petrol or diesel rates.

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