Business Car Mileage Rates Increase

Business Car Mileage Rates Increase

Advisory Fuel Rates (AFRs) 1st December 2018 to 28 February 2019 rates are in...

HMRC have recently announced the latest Advisory Fuel Rates, which came into effect on December 1st, 2018.

Company car drivers in diesels over 2.0-litre engines can charge an extra 1p per mile (ppm) for any business mileage used, which initially rises from 13-14 ppm.

However, there have been no changes to the rates for petrol cars from when the rates were released back in September.

There is also a 1ppm increase for LPG (liquefied petroleum gas) vehicles with an engine of 1,400cc or less, from 7-8ppm, and for LPG vehicles with an engine from 1,600-2,000cc, from 9-10ppm. LPG vehicles with an engine above 2,000cc have also increased from 13-15ppm.

As for The Advisory Electric Rate - introduced in September 01, 2018 - remains the same at 4ppm. These rates only apply to electric vehicles and not Plug-In Electric Vehicles (PHEV’s).

How the new business mileage rates work

Diesel company car drivers can still use the previous ppm AFRs for up to one month, but once that expires, the new rates will apply.

What is a company car?

A company car is basically when the employer provides a vehicle for the employee to use. Typically, business mileage is covered in terms of the fuel, and sometimes personal mileage is also covered depending on the employer. All the maintenance repair changes are included as well i.e tyre changes, oil changes, filter changes, and the MOT if necessary. All of these are incorporated in the company car.

Read more: Company car Tax Explained

The updated company car business mileage rates can be seen in the tables below;

New Business Car Mileage Rates

Petrol Company cars Diesel Company cars Hybrid powered company cars Electric company cars LPG company cars
Engine size 1400cc or less: 12p – unchanged Engine size 1600cc or less: 10p – unchanged Drivers of petrol/electric hybrid company cars should use the petrol rates. Fully electric car – 4p Engine size 1400cc or less: 8p – up 1p;
1401cc to 2000cc: 15p – unchanged 1601cc to 2000cc: 12p – unchanged Drivers of diesel/electric hybrid cars should use the diesel rates.   1401cc to 2000cc: 12p – up 3p;
Over 2000cc: 22p – unchanged Over 2000cc: 14p –up 1p     Over 2000cc: 15p – up 2p

Previous Business car mileage rates

Engine size Petrol - amount per mile LPG - amount per mile
1400cc or less 12 pence 7 pence
1401cc to 2000cc 15 pence 9 pence
Over 2000cc 22 pence 13 pence

Engine size Diesel - amount per mile
1600cc or less 10 pence
1601cc to 2000cc 12 pence
Over 2000cc 13 pence

The rates for petrol and diesel cars is the same for hybrids.

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