Changes to The Advisory Fuel Rates From 1 June 2010
To reflect the increase in fuel prices, HMRC have issued new advisory fuel rates for employees driving employer provided cars. These take effect for all journeys undertaken from 1 June 2010, so employers using the advisory rates should advise affected employees and update any expense forms as soon as possible.
The advisory fuel rates may be used for journeys undertaken on or after 1 June 2010.
Engine size |
Petrol |
Diesel |
LPG |
1400cc or less |
12p (11p) |
11p (11p) |
8p (7p) |
1401cc – 2000cc |
15p (14p) |
11p (11p) |
10p (8p) |
Over 2000cc |
21p (20p) |
16p (14p) |
14p (12p) |
HMRC have in the past given employers a month’s notice of changes to these rates. However, according to the HMRC guidance:
“These rates apply to all journeys on or after 1 June 2010 until further notice, allowing them to reflect fuel prices more quickly. 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.”
Other points to be aware of about the advisory fuel rates:
- Employers do not need a dispensation to use these rates.
- Employees driving employer provided cars are not entitled to use these rates to claim tax relief if employers reimburse them at lower rates. Such claims should be based on the actual costs incurred.
- The advisory rates are not binding where an employer can demonstrate that the cost of business travel in employer provided cars is higher than the guideline mileage rates. The higher cost would need to be agreed with HMRC under a dispensation.
If you would like to discuss your car policy, please contact us.
Internet link: HMRC advisory fuel rates
To find out more about how we can help you, please contact Simon Coles & Co, London Chartered Accountants. |
