Tax allowances

Advisory fuel rate for company cars


These are the suggested reimbursement rates for employees’ private mileage using their company car from 1 September 2016. Where there has been a change the previous rate is shown in brackets.

Engine Size Petrol Diesel LPG
1400cc or less


10p 7p
1600cc or less


9p (8p)
1401cc to 2000cc


13p (12p) 9p (8p)
1601 to 2000cc


Over 2000cc


20p (19p) 12p (11p) 13p

You can continue to use the previous rates for up to 1 month from the date the new rates apply.


VAT Implications of Employee Mileage Claims

Note that where employers reimburse their employees 45p per mile for using their own cars they are able to reclaim input VAT based on the amounts shown in the table.

In the case of a 1600cc diesel car that would be 1.5 pence per mile.  (9p x 20/120). Such a claim needs to be supported by a receipt from the filling station.


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