Mike Purcell Accountant and Software Consultant

Employers should reimburse business mileage at the following ‘Advisory Fuel Rates’ when employees use a company car:

Advisory Fuel Rates from 1 December 2019

These rates apply from 1 December 2019. You can use the previous rates for up to 1 month from the date the new rates apply.

Engine size Petrol - amount per mile LPG - amount per mile
1400cc or less  12 pence 8 pence
1401cc to 2000cc 14 pence 9 pence
Over 2000cc 21 pence 14 pence
Engine size Diesel - amount per mile
1600cc or less  9 pence
1601cc to 2000cc 11 pence
Over 2000cc 14 pence

Hybrid cars are treated as either petrol or diesel cars for this purpose.

Advisory Electricity Rate
The Advisory Electricity Rate for fully electric cars is 4 pence per mile. Electricity is not a fuel for car fuel benefit purposes.

Business mileage for employee using their own car

Employers can reimburse business mileage at the following rates when employees use their own cars
First 10,000 miles of the tax year 45 pence / mile
Any additional mileage 25 pence / mile

VAT can be claimed on the ‘advisory fuel rate’ element of these amounts. The above amounts are inclusive of VAT. You will need to check the current advisory fuel rates as they can change on a regular basis. View these here.

Passenger Payments

If your employee carries another employee in their own car or van on a business journey, you can pay them passenger payments of up to 5p per mile tax-free.

Paying for meals when the employee is away from the officeHMRC have set ‘Benchmark Rates’ for reimbursing employees for meals incurred when an employee travels away from the office for a minimum amount of time. 

HMRC Benchmark rates for subsistence expenses:

Minimum journey time Maximum amount of meal allowance
5 Hours £5
10 Hours £10
15 Hours (and ongoing at 8pm)  £25

Please click here for more detailed guidance: 

The above rates are HMRC’s benchmark rates and can be paid to the employee without the requirement for receipts. However, if you pay more than the benchmark scale rates then you need to report this amount as a benefit in kind, unless you are reimbursing actual costs which receipts have been provided for.