The rates will only apply to employees who are using a company car.

These rates should not be used in any other circumstances other than the below:

  • reimburse employees for the company cars for their business travel
  • employees need to repay the cost of fuel used for private travel

Reimburse employees for a company car for their business travel:

There will be no Class 1A National Insurance to pay and no taxable profit if, the mileage rate you pay is no higher than the fuel type of the company car and the fuel rates for the engine size.

You will be able to use your own rates to reflect your situation only if your cars are more fuel-efficient or if the cost of business travel is higher than the guideline rates.

Employees need to repay the cost of fuel used for private travel:

If you are able to record all private travel mileage correctly and using the correct rate, then there will be no fuel benefit. This will also work out that how much your employees should repay you for the fuel used for private travel.

You can show that employees cover the full cost of private fuel by repaying at a lower mileage rate so you will not need to use the advisory rates.

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