information from the car leasing firm or fleet provider. Zero-emission mileage figures may also be located on a vehicle’s Certificate of Conformity.
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Advisory Fuel Rates 26 May 2020
Company car Advisory Fuel rates that will apply from 1 June 2020 have been published.
HMRC has issued details of the latest Advisory Fuel Rates (AFRs) for Company Cars. Rates will apply from 1 June 2020.
For one month from the date of change, employers may use either the previous or new current rates, as they choose. Employers may therefore make or require supplementary payments if they so wish but are under no obligation to do either.
The new rates are below (previous rate in brackets where there is a change):
Engine size
Petrol
LPG
1400cc or less
10p (12p)
6p (8p)
1401cc to 2000cc
12p (14p)
8p (10p)
Over 2000cc
17p (20p)
11p (14p)
Engine size
Diesel
1600cc or less
8p (9p)
1601cc to 2000cc
9p (11p)
Over 2000cc
12p (13p)
Hybrid cars are treated as either petrol or diesel cars for this purpose.
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Calculating Advisory fuel rates 27 July 2020
HMRC has published detailed guidance relating to advisory fuel rates for company car users, including when they can be used and how they are calculated.
As well as the detailed guidance on how the advisory fuel rate is calculated, the guidance makes it clear the tax and National Insurance (NI) liabilities that are reportable where a rate above the advisory fuel rate is reimbursed to the employee. If an employer reimbursement is no more than the advisory fuel rates for the engine size and fuel type of the company car, the employee is not liable to pay either tax or NI. Employers are advised that if the company car provided is more fuel efficient or the cost of business travel is higher than the advisory fuel rates, employers can use their own rates to reflect their personal situations. If the cost of business travel is higher than the advisory fuel rates, and employers choose to pay a higher rate to cover the cost of business miles travelled, proof will need to be provided to prove costs for no fuel benefit charge to arise. If this cannot be proven, any excess of the advisory fuel rates will need to be treated as earnings, liable to both tax and NI.
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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