New advisory fuel rates from 2017-2018 from HMRC

  • by Carole Jordan
  • 11 Aug, 2017
HMRC Advisory fuel rates small business accountants brighton

HMRC have released their new advisory fuel rates for drivers of company vehicles. These came into effect from 1st July and allow reimbursement of fuel tax free at these levels.

What are the new advisory fuel rates?

These new rates will need to be used from July 1st 2017 for all of your relevant employees.

See our table below for a detailed breakdown of the different rates.

Engine size Petrol per mile LPG per mile Diesel per mile
Up to 1,400cc 11p (11p) 7p (7p) -
1,401cc to 2,000cc 14p (14p) 9p (9p) -
Up to 1,600cc - - 9p (9p)
1,601cc to 2,000cc - - 11p (11p)
Over 2,000cc 21p (22p) 14p (14p) 13p (13p)

VAT savings to be made

If you’re paying your employee fuel expenses then you can reclaim the VAT from these costs – equal to one-sixth of the cost incurred.

If you’re looking for more advice on employee benefits and expenses then see our blog series on these topics:

-         Could rewarding your employees give them a larger tax bill?

-         Important changes to employee benefit reporting

-         Tax relief for childcare costs - Do Small Businesses have a choice?

If you would like further advice on any of the above then please give us a call on: 01273 882200.

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