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HMRC Fuel Rates for Petrol & Diesel: A Beginner’s Guide to Saving Money
Discover how HMRC fuel rates for petrol and diesel paintings, learn to declare mileage allowance, and avoid tax pitfalls—all defined simply for novices.
Table of Contents
Introduction
Ever questioned the way to get reimbursed for fuel prices while the use of your automobile for work? Whether you’re a freelancer, small business proprietor, or employee, expertise HMRC gasoline fees for petrol and diesel can save you money and simplify tax season. In this guide, we’ll smash down the whole thing you need to recognize about mileage claims, tax alleviation, and keeping off common mistakes—no jargon, simply straight communicate.
What Are HMRC Fuel Rates?
HMRC fuel rates, officially called Approved Mileage Allowance Payments (AMAP), are fixed amounts you can claim per business mile driven without paying tax. These rates cover fuel, insurance, and maintenance costs.
Key Details:
- 45p per mile for the first 10,000 business miles (cars/vans).
- 25p per mile after 10,000 miles.
- 24p per mile for motorcycles.
- 20p per mile for bicycles.
Note: Rates are the same for petrol and diesel vehicles.
How Do HMRC Fuel Rates Work?
Whether you drive a petrol, diesel, or hybrid car, HMRC doesn’t differentiate—the rates depend on your vehicle type and miles driven.
Claiming Mileage Allowance: A Step-by-Step Guide
- Track Your Miles: Use a logbook or app like Mile IQ.
- Multiply by HMRC Rates: E.g., 100 miles x 45p = £45.
- Report to Employer/HMRC: Include claims in your tax return if self-employed.
Example: Sarah drives her diesel car 8,000 miles for work. She claims 8,000 x 45p = £3,600 tax-free.
Petrol vs. Diesel: Does It Affect Your Claim?
While HMRC rates don’t change based on fuel type, your car’s efficiency impacts out-of-pocket costs.
Real-Life Scenario:
- Diesel Car: 60 MPG, lower fuel costs per mile.
- Petrol Car: 40 MPG, higher fuel costs per mile.
Tip: Use HMRC rates to cover costs, but compare your actual fuel spend to maximize savings.
Company Cars and Fuel Benefits
If your employer provides a company car and covers private fuel, this becomes a taxable benefit.
2023/24 Fuel Benefit Charges
- Car Benefit Charge: Based on CO₂ emissions and list price.
- Fuel Benefit Charge: Flat £27,800 multiplier x CO₂ percentage.
Example: A car with a 30% CO₂ rate incurs a £8,340 fuel tax charge (£27,800 x 30%).
5 FAQs About HMRC Fuel Rates
1. Can I Claim for Diesel Cars?
Yes! HMRC rates apply to all fuel types. Track miles and apply the 45p/25p rates.
2. What If My Employer Pays Less Than HMRC Rates?
You can claim tax relief on the difference. E.g., if paid 30p/mile for 1,000 miles:
- Tax Relief = (45p – 30p) x 1,000 = £150.
3. Do Electric Vehicles (EVs) Qualify?
Yes! EVs use the same 45p rate. Plus, you save on fuel costs and emissions.
4. How Are Long-Distance Trips Treated?
All business miles count, whether it’s a 1-mile errand or a 200-mile client visit. Keep records!
5. What Records Do I Need?
- Dates/times of trips.
- Mileage start/end points.
- Purpose of the journey.
Tips for Maximizing Your Claims
- Use Apps: Try Ever lance or Drivers note for automatic tracking.
- Review HMRC Updates: Rates change occasionally—check HMRC’s website.
- Consult a Tax Pro: For complex cases, like mixed business/personal use.
Conclusion
Understanding HMRC fuel rates for petrol and diesel helps you claim what you’re owed and dodge tax headaches. Remember:
- Track every business mile.
- Use 45p/25p rates for cars/vans.
- Diesel/petrol rates are the same.
Ready to save? Start logging your miles today, and share this guide with a friend who might need it!
Author Bio
James flick is a certified tax advisor with 10+ years of experience helping individuals and businesses navigate HMRC regulations. Her work has been featured in Tax Journal and Small Business UK.