Mileage Allowances

Fuel-only Mileage Rates

HMRC published rates that can be used by employers wishing to pay their employees the cost of fuel for business journeys in company cars (or, where the employer initially pays for all the fuel, for reimbursement of private mileage by company car drivers to their employers).

The latest HM Revenue & Customs advisory mileage rates for employee private mileage reimbursement or employer reimbursement of business mileage are:

Rates from 1 December 2009

Fuel mileage rates		Rates per mile
Engine Capacity	Petrol	Diesel	LPG
Up to 1400cc	11p	11p	7p
1401 - 2000cc	14p	11p	8p
Over 2000cc	20p	14p	12p

Rates from 1 July 2009 to 30 November 2009

Fuel mileage rates		Rates per mile
Engine Capacity	Petrol	Diesel	LPG
Up to 1400cc	10p	10p	7p
1401 - 2000cc	12p	10p	8p
Over 2000cc	18p	13p	12p

Rates from 1 January 2009 to 30 June 2009

Fuel mileage rates		Rates per mile
Engine Capacity	Petrol	Diesel	LPG
Up to 1400cc	10p	11p	7p
1401 - 2000cc	12p	11p	9p
Over 2000cc	17p	14p	13p

Rates from 1 July 2008 to 31 December 2008

Fuel mileage rates		Rates per mile
Engine Capacity	Petrol	Diesel	LPG
Up to 1400cc	12p	13p	7p
1401 - 2000cc	15p	13p	9p
Over 2000cc	21p	17p	13p

HM Revenue & Customs have announced that rates will now be reviewed biannually and generally any changes will take effect on 1 January and 1 July. HM Revenue & Customs will also consider changing the rates if fuel prices fluctuate by 5% from the published rates when each review is made and consider that the price change will be sustained.

For Employees Using Their Own Transport

The approved maximum tax and national insurance free mileage allowances for employees using their own transport for business are as follows:

Flat Rate	First 10,000 miles	Miles over 10,000
Car or van	40p	25p
Motorcycle	24p	24p
Bicycle	20p	20p

Income Tax and NICs are due when allowances exceed these rates. Employees can claim tax relief on any shortfall.

Passenger Payments

Rates of up to 5p per mile, per passenger, are also tax and NIC free when paid for the carriage of fellow employees in a car or van on the same business trip.

Company Cars

The charge is based on the price of the car for tax purposes (normally the list price) and accessories multiplied by an appropriate percentage based on the level of CO2 emissions and the fuel the car uses. Please refer to our car benefit calculator.

Fuel Charges - Company Cars

The taxable benefit of free fuel provided for a company car is calculated using the same CO2 figures which apply when calculating the company car charge. The percentage figure is applied to a fixed amount of £ 16,900 for 2008-2009 onwards (From 2003-04 to 2007-08 the fixed amount was £ 14,400). The fuel benefit is reduced to nil if the employee is required to make good the full cost of all fuel provided for private use.