New Advisory Fuel Rates (AFRs) from HMRC became effective 01 June.
AFRs are the rate, in pence per mile (PPM), suggested for reimbursing company car drivers for business mileage. They can also be used by drivers to reimburse employers for private mileage where all fuel is paid and thus avoid paying punitive free fuel tax.
The revised rates affect AFRs for petrol and diesel cars. Hybrid cars should use the rate for the primary fuel of the vehicle (eg a petrol-electric hybrid should use the petrol figures).
The new rates can be used immediately, or HMRC allows the previous rates to be used until the end of June.
For diesel powered models, the new rate for cars with engine capacities of 1,600cc or less will be 9ppm, while the AFR for cars with engine capacities from 1,601cc to 2,000cc is 11ppm and for cars with engines with capacities greater than 2,000cc the AFR is 13ppm.
The rates for diesel engines <1,600cc and from 1,601cc to 2,000cc have remained the same as before, while for engines of capacity greater than 2,000cc, the AFR has been increased by 1ppm.
It’s a different story for petrol powered models. The AFR for cars powered by engines of 1,400cc capacity or less has been increased by 1ppm to 11ppm. For engines from 1,401cc to 2,000cc the AFR has increased by 1ppm to 13ppm, while for engines of larger capacities than 2,000cc, the AFR has also risen by 1ppm to 19ppm.
“The latest AFRs reflect the steadily rising price of forecourt fuel that we have seen since late last year,” says Rob Marshall, Operations Director at Gateway2Lease.
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