Advisory Fuel Rates for Company Cars

Advisory rates only apply where employers reimburse employees for business travel in a company car or require employees to repay the cost of fuel used for private travel in a company car. If the rate paid per mile of business travel is no higher than the advisory rate for the engine size and fuel type of the car, HMRC will accept that there is no taxable profit and no Class 1 NIC liability.


Engine size (cc)Pence per mile
1400 of less12p
1401 to 200015p
Over 200022p


Engine size (cc)Pence per mile
1600 of less10p
1601 to 200012p
Over 200013p


Engine size (cc)Pence per mile
1400 of less7p
1401 to 20009p
Over 200013p

Car Benefit

Car benefit is calculated by multiplying the car’s list price, when new, by a percentage linked to the car’s CO2 emissions.

The list price includes accessories and special rules may apply to cars that are provided to disabled employees. The list price is reduced for capital contributions made by the employee up to £5,000.

Car Fuel Benefit

Car fuel benefit applies if an employee has the benefit of private fuel for a company car. The benefit is calculated by applying the percentage used to calculate the car benefit by a fuel charge multiplier. The charge is proportionately reduced if provision of private fuel ceases part way through the year and is reduced to nil if the employee pays for all private fuel.

Mileage Allowance Payments for Employees

Mileage Allowance Payments represent the maximum tax free mileage allowances an employee can receive from their employer for using their own vehicle for business journeys. If the employee receives less than the statutory rate, tax relief can be claimed on the difference.

Employers are allowed to pay a certain amount of Mileage Allowance Payments each year without having to report payments to HMRC.

Vehicle TypePence per mile
Cars and vansup to 10,000 miles45p
over 10,000 miles25p

Van Benefit

Van benefit is chargeable if a van is available for an employee’s private use. A fuel benefit may also be chargeable if an employee has the benefit of private fuel paid for in respect of a company van.

The charges do not apply if the restricted private use condition is met throughout the year. A reduced benefit charge may apply to vans which do not emit CO2 when driven.