The 1st December 2020 Advisory Fuel Rates (AFR) have been cut by 1p per mile for petrol vehicles with engines of 1400-2000cc, while the diesel amount per mile for vehicles across all engine sizes remains unchanged.

The rates can only be applied to:

  • reimburse employees for business travel in their company cars; or
  • require employees to repay the cost of fuel used for private travel.

The advisory electricity rate for fully electric cars is unchanged at 4p per mile. Electricity is not a fuel for car fuel benefit purposes.

When employees are reimbursed for business travel in their company cars, HMRC will accept there is no taxable profit and no Class 1A national Insurance to pay.

Advisory fuel rates from 1 December 2020

Engine sizePetrol – amount per mileLPG – amount per mile
1400cc or less10p7p
1401cc to 2000cc11p8p
Over 2000cc17p12p

 

Engine sizeDiesel – amount per mile
1600cc or less8p
1601cc to 2000cc10p
Over 2000cc12p

Hybrid cars are treated as either petrol or diesel cars for this purpose.

HMRC reviews rates quarterly on 1 March, 1 June, 1 September and 1 December.