These changes only affect the fuel only rates, the business mileage rates are unchanged
Tax: rates per business mile
First 10,000 miles
Above 10,000 miles
Cars and vans
45p (40p before 2011 to 2012)
25p
Motorcycles
24p
24p
Bikes
20p
20p
Its the Approved Mileage Rates that keep changing
From 1 September 2021
You can use the previous rates for up to 1 month from the date the new rates apply.
Engine size
Petrol – rate per mile
LPG – rate per mile
1400cc or less
12 pence
7 pence
1401cc to 2000cc
14 pence
8 pence
Over 2000cc
20 pence
12 pence
Engine size
Diesel – rate per mile
1600cc or less
10 pence
1601cc to 2000cc
12 pence
Over 2000cc
15 pence
From 1 June 2021 to 31 August 2021
Engine size
Petrol – rate per mile
LPG – rate per mile
1400cc or less
11 pence
8 pence
1401cc to 2000cc
13 pence
9 pence
Over 2000cc
19 pence
14 pence
Engine size
Diesel – rate per mile
1600cc or less
9 pence
1601cc to 2000cc
11 pence
Over 2000cc
13 pence
1 March 2021 to 31 May 2021
Engine size
Petrol – rate per mile
LPG – rate per mile
1400cc or less
10 pence
7 pence
1401cc to 2000cc
12 pence
8 pence
Over 2000cc
18 pence
12 pence
Engine size
Diesel – rate per mile
1600cc or less
9 pence
1601cc to 2000cc
11 pence
Over 2000cc
12 pence
1 December 2020 to 28 February 2021
Engine size
Petrol – rate per mile
LPG – rate per mile
1400cc or less
10 pence
7 pence
1401cc to 2000cc
11 pence
8 pence
Over 2000cc
17 pence
12 pence
Engine size
Diesel – rate per mile
1600cc or less
8 pence
1601cc to 2000cc
10 pence
Over 2000cc
12 pence
For hybrid cars you must use the petrol or diesel rate which may differ significantly from the actual fuel costs. The advisory electricity rate for fully electric cars is 4 pence per mile.
Employees should carefully consider whether it is advantageous having private fuel provided for their company car. Remember that the P11d benefit for having private fuel provided for a company car in 2021/22 is £24,600 multiplied by the CO2 emissions percentage for that vehicle.
For example, a director driving a Mercedes Benz E200 saloon company car (CO2 emissions 169g per km) would be assessed on 37% = £9,102 for 2020/21. If they are a higher rate taxpayer that would mean £3,641 tax. That is an awful lot of private fuel!
reimburse employees for business travel in their company cars
require employees to repay the cost of fuel used for private travel
If you pay a rate per mile for business travel no higher than the AFR, for the particular engine size and fuel type, HM Revenue and Customs (HMRC) will accept there is no taxable profit and no Class 1A National Insurance to pay.
You can use your own rates which better reflect your circumstances if, for example, your cars are more fuel efficient, or if the cost of business travel is higher than the guideline rates.
Advisory Fuel Rates from 1 March 2015
These rates applied from 1 March 2015. You can use the previous rates for up to 1 month from the date the new rates apply.
Engine size
Petrol – amount per mile
LPG – amount per mile
1400cc or less
11p
8p
1401cc to 2000cc
13p
10p
Over 2000cc
20p
14p
Engine size
Diesel – amount per mile
1600cc or less
9p
1601cc to 2000cc
11p
Over 2000cc
14p
COMPANY car mileage rates have been slashed by up to 18% as HMRC cut the tax allowance across all six of the petrol and diesel categories in response to continuing fuel price falls.
Hardest hit by the rates, known as advisory fuel rates (AFR), are drivers of company cars with petrol engines greater than 1,401cc which have suffered a 3p cut in rates applicable from 1 March.