HMRC Advisory Fuel Rates

Advisory fuel rates are the HMRC reference rates employers commonly use when reimbursing business fuel in a company car or when recovering the fuel cost of private mileage. They are not the same thing as AMAP, which applies to employees using their own vehicle.

This is why advisory fuel rates matter most to payroll, finance, and fleet teams. The keyword looks like a mileage topic, but the real decision is whether the employer is paying for fuel in a company-car setup.

HMRC publishes separate rates by fuel type and engine size, and it applies them from a stated date. If you use the right rate on the wrong date, you still have the wrong answer.

Electric cars now have their own advisory electricity rate. That matters when a business wants a clean rule for reimbursing work charging without rolling everything into a car allowance.

• Check the effective date before copying a rate into payroll or expense policy.
• Use AMAP for employees in their own car; use advisory fuel rates for company-car fuel decisions.
• Treat private-fuel recovery and business-fuel reimbursement as two sides of the same HMRC table.

The common mistake is blending AMAP and advisory fuel rates into one policy sentence. They solve different problems and should be documented separately. AMAP covers business use of an employee's own vehicle. Advisory fuel rates deal with fuel in a company-car context.

If you are writing policy from scratch, give each method its own section and a named owner in payroll or finance. That keeps exceptions from becoming ad hoc taxable payments later.