Advisory Fuel Rates (AFRs)
A set of rates (currently based on engine size and fuel type) to represent HMRC’s view of what are reasonable rated for tax-free reimbursements of fuel costs. Strictly speaking they apply to company cars only but the method of calculation is plainly suitable for any fuel reimbursement process. The idea is to identify a fair-to-both-sides rate that can apply to drivers claiming the cost of the business mileage from all the fuel they’ve bought; or a fair claw-back from the employee to the employer for the cost of the employee’s private mileage where the company pays for all the fuel on account or through a fuel card.
