The government has published the latest AFR rates, which companies use to repay drivers for fuel used on business mileage.

The rates, which are effective for the next six months, have gone up by 1p per mile for each category of petrol cars but have remained the same for all but the highest capacity of diesel-powered cars.

This is despite the fact that diesel costs have rocketed since the previous rates were set in December.

It also means the majority of company vehicle drivers who drive diesel-powered cars will continue to find themselves out of pocket when driving on business.

The new rates apply to all business journeys on or after 1 June.

For one month from the date of change, employers may use either the previous or new current rates, as they choose. Employers may therefore make or require supplementary payments if they so wish, but are under no obligation to do either, said HMRC.

The rates are

Engine size            Petrol     Diesel     LPG
1400cc or less       12p        11p         8p
1401cc to 2000cc   15p        11p        10p
Over 2000cc          21p        16p        14p
 

Petrol hybrid cars are treated as petrol cars for this purpose.

HMRC will also consider changing the rates if fuel prices fluctuate by 5% from the published rates when each review is made and it considers the price change will be sustained.

Read more about the new rates and what they mean for drivers and fleet managers in the June 10 issue of Fleet News.