New Advisory Fuel Rates
Please note that Advisory Fuel Rates apply only to employees using a company car.
Be aware that new rates apply from 1 September 2021. Please note that you can use the previous rates for up to one month from the date the new rates apply.
|Engine size||Petrol – Advisory Fuel Rate||LPG – Advisory Fuel Rate|
|1400cc or less||12 pence||7 pence|
|1401cc to 2000cc||14 pence||8 pence|
|Over 2000cc||20 pence||12 pence|
|Engine size||Advisory Fuel Rate|
|1600cc or less||10 pence|
|1601cc to 2000cc||12 pence|
Hybrid cars are treated as either petrol or diesel cars for this purpose.
Advisory Electricity Rate
The Advisory Electricity Rate which applies for fully electric cars is 4 pence per mile.
Electricity is not a fuel for car benefit purposes.
Employee vehicles: Mileage Allowance Payments (MAPs)
Mileage Allowance Payments (MAPs) are what you pay your employee for using their own vehicle for business journeys. You’re allowed to pay your employee a certain amount of MAPs each year without having to report them to HMRC. This is called an ‘approved amount’.
To calculate the ‘approved amount’, multiply your employee’s business travel miles for the year by the rate per mile for their vehicle.
You can use HMRC’s MAPs working sheet should you need more help.
Tax: rates per business mile
|Type of vehicle||First 10,000 miles||Above 10,000 miles|
|Cars and vans||45p||25p|
Your employee travels 12,000 business miles in their car – the approved amount for the year would be £5,000 (10,000 x 45p plus 2,000 x 25p).
What to report and pay
Anything above the ‘approved amount’
- report on form P11D
- add anything above the ‘approved amount’ to the employee’s pay, and deduct and pay tax as normal
Anything below the ‘approved amount’
You won’t have to report to HMRC or pay tax, but:
- your employee will be able to get tax relief (called Mileage Allowance Relief, or MAR) on the unused balance of the approved amount
- you can make separate optional reports to HMRC of any such unused balances under a scheme called the Mileage Allowance Relief Optional Reporting Scheme (MARORS) – contact HMRC to join the scheme
More details on advisory fuel rates can be found on HMRC’s website.
Alternatively, contact your local MFW office.
Company Car drivers in lockdown and Benefits in Kind (BIK) tax
If you are not using your company car and will not be for the foreseeable future are you still liable to pay Benefits in Kind (BIK) tax? Visit our Coronavirus FAQ page for more details.