HMRC reduces diesel advisory fuel rates for smaller capacity engines

HM Revenue and Customs (HMRC) is reducing advisory fuel rates (AFRs) for smaller capacity diesel engines by 1p as of September 1.

Diesel vehicles with an engine size of 1600cc or less have seen a drop from 12p to 11p and vehicles with an engine size between 1600cc and 2000cc have seen a reduction from 14p to 13p. AFRs for vehicles over 2000c are unchanged at 17p.

HMRC made the reduction as part of its quarterly review. The rates apply only where employers reimburse employees for business travel in their company cars or require employees to repay the cost of fuel used for private travel.

All other AFRs remain the same.

The rates apply to all journeys on or after September 1, 2014 until further notice. For one month from the date of change, employers may use either the previous or new current rates, as they choose.

Since March 2011 the rates have been reviewed four times a year. HMRC will no longer consider changing the rates if fuel prices fluctuate by 5% from the published rates.

AFRs as of September 1, 2014: