HMRC Advisory Fuel Rates 2019/2020

What Are the HMRC Advisory Fuel Rates for 2019/2020?

The HMRC Advisory Fuels Rates are the amounts set out by HMRC that you need when:

  1. reimbursing employees for business travel who have company cars;
  2. setting rates that employees repay businesses for private fuel use on fuel cards;
  3. calculating VAT on mileage claims.

You’ll need to use these HMRC Advisory Fuel Rates regardless of the true cost of the fuel for any of the above

HMRC Advisory Fuel Rates 2019/2020

The HMRC Advisory Fuel Rates can change each year but the current rates are:

Engine sizePetrol - amount per mileLPG - amount per mile
1400cc or less11 pence7 pence
1401cc to 2000cc14 pence9 pence
Over 2000cc21 pence14 pence
Engine sizeDiesel - amount per mile
1600cc or less10 pence
1601cc to 2000cc12 pence
Over 2000cc14 pence

The Advisory Electricity Rate for fully electric cars is 4 pence per mile. Hybrid cars are treated as either petrol or diesel cars for this purpose.

HMRC Advisory Fuel Rates vs Mileage Allowance Payments

Mileage allowance payments are used when a business reimburses an employee when they use their personal vehicle for business travel.

HMRC have a set allowance per mile, depending on the type of vehicle used and the number of miles travelled.

The current HMRC mileage allowance rates are:

 First 10,000 MilesOver 10,000 Miles
Cars and vans45p25p
Motor cycles24p24p

Mileage allowance payments are higher. This is because they reflect the running costs of the vehicle such as:

  • wear and tear;
  • insurance;
  • maintenance;
  • insurance.

The HMRC Advisory fuel rates relate to just fuel. That’s why they are used when employees have a Company Car (because the company will be picking up the running costs of the car).

Reclaiming VAT on Advisory Fuel Rates

VAT registered businesses are entitled to reclaim VAT on expenses, including fuel.

Fuel is vat-able at the standard VAT rate of 20% so it is possible to reclaim VAT on advisory fuel rates since this is a reflection of fuel costs. Here’s how to claim back VAT on mileage claims to reduce your tax bill.

Updated 15 July 2019

Anita Forrest
About Anita Forrest

Anita Forrest is a Chartered Accountant, spreadsheet geek, money nerd and creator of www.goselfemployed.co - a UK small business finance blog where she shares help and advice with the self-employed community to make topics like registering a business, bookkeeping and taxes easy to understand.