Advisory Fuel Rates

Advisory Fuel Rates

If company cars are a part of your work or business then you need to know about advisory fuel rates. It’s a tax charged by the government on all company cars and if you drive one then you might have to pay it. To help you get up to speed, we’ve explained all the key details you need to know about advisory fuel rates. 

What are advisory fuel rates for vehicles? 

Advisory fuel rates are rates put in place by the UK government to ensure that the correct tax is paid on the fuel used by company cars. This covers petrol, diesel, hybrid (these either pay the petrol or diesel rate), and electric cars. 

There are two instances where advisory fuel rates apply to company cars: 

  1. As a means of reimbursing employees for any business travel they’ve paid for.
  2. As a means of ensuring employees repay the cost of the fuel used for personal trips.

While petrol, diesel, and hybrid cars have been required to pay advisory fuel rates for many years, advisory fuel rates were only introduced for electric cars on 1 September 2018.  

Current government advisory fuel rates

Advisory fuel rates are based on both the engine type and size of company cars. They are set by the UK government four times each year – on the 1 March, 1 June, 1 September, and 1 December. 

You can see the current government advisory fuel rates in the table below:

It’s important to know that the advisory fuel rates for electric cars only apply to cars that are fully electric, so not hybrids. 

An explanation of how advisory fuel rates are calculated

Like many government levies, the UK government provides an explanation of how advisory fuel rates are calculated. How does it do it? Quite simply, by using fuel prices. 

It makes this calculation by using six different fuel price data inputs: 

  • Engine size (cc)
  • Mean miles per gallon
  • Applied per gallon
  • Fuel price (per litre)
  • Fuel price (per gallon)
  • Pence per mile

The tables below show you how advisory fuel rates are calculated by the UK government (figures are up to date as of 27 November 2019).

LPG stands for liquefied petroleum gas – also known as autogas. 

A list of the historical advisory fuel rates

Advisory fuel rates aren’t static – they are updated four times every year, with the rates being amended in March, June, September, and December.

To give you an idea of how much the advisory fuel rates change every quarter, we’ve included the rates from 1 September 2018 to June 2019.

UK Government Fuel Rates As Of 1 June 2019
Size of engine Type of engine
Petrol Diesel LPG Electric
1,400cc or lower £0.12 N/A £0.08 £0.04
1,600cc or lower N/A £0.10 N/A £0.04
1,401cc – 2,000cc £0.15 N/A £0.09 £0.04
1,601cc – 2,000.cc N/A £0.12 N/A £0.04
More than 2,000cc £0.22 £0.14 £0.14 £0.04

 

UK Government Fuel Rates As Of 1 March 2019
Size of engine Type of engine
Petrol Diesel LPG Electric
1,400cc or lower £0.11 N/A £0.07 £0.04
1,600cc or lower N/A £0.10 N/A £0.04
1,401cc – 2,000cc £0.14 N/A £0.08 £0.04
1,601cc – 2,000.cc N/A £0.11 N/A £0.04
More than 2,000cc £0.21 £0.13 £0.13 £0.04

 

UK Government Fuel Rates As Of 1 December 2018
Size of engine Type of engine
Petrol Diesel LPG Electric
1,400cc or lower £0.12 N/A £0.08 £0.04
1,600cc or lower N/A £0.10 N/A £0.04
1,401cc – 2,000cc £0.15p N/A £0.10 £0.04
1,601cc – 2,000.cc N/A £0.12 N/A £0.04
More than 2,000cc £0.22 £0.14 £0.15 £0.04

 

UK Government Fuel Rates As Of 1 September 2018
Size of engine Type of engine
Petrol Diesel LPG Electric
1,400cc or lower £0.12 N/A £0.07 £0.04
1,600cc or lower N/A £0.10 N/A £0.04
1,401cc – 2,000cc £0.15 N/A £0.09 £0.04
1,601cc – 2,000.cc N/A £0.12 N/A £0.04
More than 2,000cc. £0.22 £0.13 £0.13 £0.04

 

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