HMRC has announced New Advisory Fuel Rates, applicable from 1st June 2018.
These rates apply to employees with company cars and those who reimburse employers for their private fuel use.
New Advisory Fuel Rates from 1 June 2018
|Engine size||Petrol – amount per mile||LPG – amount per mile|
|1400cc or less||11 pence||7 pence|
|1401cc to 2000cc||14 pence||9 pence|
|Over 2000cc||22 pence||14 pence|
|Engine size||Diesel – amount per mile|
|1600cc or less||10 pence|
|1601cc to 2000cc||11 pence|
|Over 2000cc||13 pence|
Hybrid cars are treated as either petrol or diesel cars for this purpose.
What Does This Mean For Employers and Employees?
Employers who pay employees at or below the pence per mile payment applicable to their engine size and fuel type, will not attract any Class 1A National Insurance liabilities.
There will also be no charge to employers if a higher rate per mile is paid to employees, if the payments relate to business travel only. This will however mean that any excess paid to employees will be treated as earnings and Class 1 National Insurance will be payable.
For employees repaying employers for their private use, provided that all calculations are correct, HMRC will accept that there is no fuel benefit charge payable.
Employers can use the previous rates for up to one month from the date the new rates apply, which can be found here.