HMRC have issued the new rates for fuel from 1st March until 31st May 2019. These rates are used to reimburse employees for business travel in their company car or for employees to reimburse the company for the fuel used for private travel in a company car.
If you pay a higher rate than that advised by HMRC the element above the advisory rate will be taxable unless you can demonstrate why you need to pay a higher rate.
The advisory fuel rate can also be used to calculate VAT on business mileage where you claim 45p per mile (or 25p over 10,000 miles). The 45p per mile covers all car costs – insurance, repairs, fuel, etc. The fuel element of the 45p is the advisory fuel rate for your vehicle size and fuel type. VAT can be calculated at 1/6th of that fuel element.
So, for example if you are claiming 100 miles at 45p you will be paid £45. If your car engine size is between 1601cc and 2000cc and is diesel, 11p of the 45p is fuel and of this 1/6th is VAT i.e. 1.83p. Therefore you can claim £1.83 of the £45 in VAT as long as you have relevant VAT fuel receipts to support the claim.
These are the new fuel rates from 1st March 2019:
| Engine Size | Petrol | Diesel | LPG |
|---|---|---|---|
| 1400cc or smaller | 11p | 7p | |
| 1401cc to 2000cc | 14p | 8p | |
| 1600cc or smaller | 10p | ||
| 1601cc to 2000cc | 11p | ||
| Over 2000cc | 21p | 13p | 13p |
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