HMRC have recently released the latest Advisory fuel rates that come into effect from 1 September 2018.

These rates apply to employees using company cars on business journeys.

There are a number of changes covering Petrol, LPG and diesel engine vehicles.


The 1400cc or less rate is increased by 1p from 11p to 12p per mile.

The 1401cc to 2000cc rate is increased by 1p from 14p to 15p per mile.


The over 2000cc rate is decreased by 1p from 13p to 14p per mile.

Diesel engine

The 1601cc to 2000cc rate is increased by 1p from 11p to 12p per mile.

HMRC have also recently confirmed that the Advisory Electricity Rate for fully electric cars is 4 pence per mile. Electricity is not a fuel for car fuel benefit purposes.

The link to the new rates is below for your information. Please note that, although the link refers to March 2016 it links through to the September 2018 rates.

Click here to view the new rates.

It is important to ensure that employees are paid within the HMRC rates to avoid a tax charge arising. During an employer compliance Inspection one of the key checks made by HMRC relates to claims made relating to business travelled, both in company cars and employees own vehicles, and HMRC make a significant amount of recoveries from employers in respect of excess rate payments.

If you would like any help in understanding how Smith Cooper can help you to minimise your risks of underpaid tax and NIC arising during HMRC compliance inspections, please contact our Employment Tax team.