Tax Calculators & Tools

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Document updated/added on 27.06.2018

Topic: Individuals

Alternative fuel rate calculator
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Alternative fuel rate calculator

Alternative fuel rate calculator

HMRC publishes advisory fuel rates for business mileage undertaken in a company car but you don’t have to use them. This tool will calculate an alternative set of rates.

Advisory rates

HMRC publishes advisory fuel rates (AFRs) which can be used to avoid a tax charge for car fuel benefit arising for employees who drive company cars. These are where:

  • employees pay for fuel used for business journeys - you can reimburse them at the AFRs for the business mileage
  • your business pays for fuel which employees use for private journeys - they can reimburse the business at the AFRs.

Unlike the rates for personal vehicles, the company AFRs do not include any element for maintenance and servicing, just the fuel cost.

The AFRs are based on a historic average cost which HMRC updates quarterly. Therefore, sharp increases in prices at the pump take a while to be reflected. Thankfully, as the rates are only advisory you can use our Alternative Fuel Rate Calculator to work out your own rates based on current prices.

Just input an estimate of the car’s fuel consumption rate and average fuel prices, or for a more accurate result enter actual fuel costs from receipts.

If prices were to fall suddenly, it will be beneficial to revert to using HMRC’s rates. You are free to swtich between AFRs and your own calculations whenever you want.

record keeping and reporting

Print and keep the calculation with your employees’ expenses claims so that you can justify paying a higher fuel rate if asked to do so by HMRC. You don’t need to report fuel rate payments on Form P11D.

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