Mileage expense software

HMRC changes to advisory fuel rates – December 2020

Every 3 months, HMRC review the advisory fuel rates. They apply to employees using a company car if:

  • You reimburse employees for business travel
  • Or require employees to repay the cost of private travel

These are “fuel only” rates, and if you use them, you have certainty that you are claiming no more than the true cost of fuel used on business journeys and so will not be taxed on a ‘fuel benefit’.

Hybrid cars are treated as either petrol or diesel cars for advisory fuel rates.

These rates apply from 1st December 2020.

Engine sizePetrol – amount per mileLPG – amount per mile
1400cc or less 10p 7p
1401cc to 2000cc 11p 8p
Over 2000cc 17p 12p
Engine size Diesel – amount per mile
1600cc or less 8p
1601cc to 2000cc 10p
Over 2000cc 12p

The advisory electricity rate for fully electric cars is 4p per mile.

Civica provide an HMRC Rate Update Service, to help organisations implement changes like these. Find out how MyExpenses can transform the management of your expenses. Or speak to your account manager to find out how to add the HMRC rate update service onto your MyExpenses account.