Fleet News

Government publishes how advisory fuel rates (AFRs) calculated

Person using fuel pump in filling station

HMRC has included details on how official mileage reimbursement rates for company car drivers – so-called advisory fuel rates (AFRs) – are calculated.

The Government tax office reviews rates quarterly, on March 1, June 1, September 1 and December 1. The latest AFRs were published a few days becoming effective on June 1.

However, while an explanation of how AFRs are calculated has always been available, HMRC has published a new page on Government website showing the individual key metrics for each fuel type and engine size. 

The mean miles per gallon (MPG) is taken from manufacturers’ information, taking into account annual sales to businesses (fleet audits average 2016 to 2018).

HMRC explained that the MPG is adjusted down by 15% to take account of real driving conditions and lower fuel economy for older cars.

For liquefied petroleum gas (LPG), the MPG used is 20% lower than for petrol due to lower volumetric energy density.

Meanwhile, the advisory electricity rate (AER) for fully electric company cars is calculated using published consumption rates, adjusted to reflect real driving conditions and the average cost of electricity.

The advisory fuel rates (AFRs) (shown below) have been worked out to one decimal place, however the final rates are rounded to the nearest whole penny.

When the precise decimal ends in a figure less than 0.5 it is rounded down to the nearest whole penny and when the precise figure ends in 0.5 or greater it is rounded up to the nearest whole penny.

The latest petrol and diesel prices are taken from the Department for Business, Energy and Industrial Strategy and the LPG (UK average) is from the AA website.

For more on AFRs, visit the Fleet News FAQ section.

Petrol

Engine size (cc)

Mean MPG

Applied MPG

Fuel price (per litre)

Fuel price (per gallon)

Rate per mile

Advisory fuel rate

Up to 1400

57.0

48.5

105.1 pence

477.8 pence

9.9 pence

10 pence

1401 to 2000

47.6

40.5

105.1 pence

477.8 pence

11.8 pence

12 pence

Over 2000

32.7

27.8

105.1 pence

477.8 pence

17.2 pence

17 pence

Diesel

Engine size (cc)

Mean MPG

Applied MPG

Fuel price (per litre)

Fuel price (per gallon)

Rate per mile

Advisory fuel rate

Up to 1600

73.6

62.6

112.2 pence

510.2 pence

8.2 pence

8 pence

1601 to 2000

63.5

54.0

112.2 pence

510.2 pence

9.4 pence

9 pence

Over 2000

51.0

43.4

112.2 pence

510.2 pence

11.8 pence

12 pence

LPG 

Engine size (cc)

Mean MPG

Applied MPG

Fuel price (per litre)

Fuel price (per gallon)

Rate per mile

Advisory fuel rate

Up to 1400

45.6

38.8

54.9 pence

249.6 pence

6.4 pence

6 pence

1401 to 2000

38.1

32.4

54.9 pence

249.6 pence

7.7 pence

8 pence

Over 2000

26.2

22.2

54.9 pence

249.6 pence

11.2 pence

11 pence


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