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Company Cars
Advisory Fuel Rates for Company Cars from 1 July 2008
HM Revenue & Customs (HMRC) has agreed to give employers one month's
notice of a change in advisory fuel rates so that they can amend their
systems in good time to implement the new rates.
However, following the recent and rapid fuel price increases
that justify the advisory fuel rate changes, HMRC has said that it understands
that an implementation date of 1 July could mean drivers incurring higher
fuel prices before the new rates become effective. As a result, HMRC
has announced that it is happy for employers to implement the new rates
from 1 June where they are able to do so.
1400cc or less |
12p |
13p |
7p |
1401cc to 2000cc |
15p
|
13p |
9p |
Over 2000cc |
21p |
17p |
13p |
Petrol hybrid cars are treated as petrol cars for this purpose.
These
rates are calculated from the fuel prices in the tables below:
|
Petrol |
up to 1400 |
48.9 |
44.0 |
114.8 |
521.8 |
11.9 |
12 |
Petrol |
1400-2000 |
39.5 |
35.6 |
114.8 |
521.8 |
14.7 |
15 |
|
Petrol |
over 2000 |
27.8
|
25.0 |
114.8 |
521.8 |
20.9 |
21 |
|
|
|
|
|
|
|
|
|
Diesel |
up to 2000 |
50.7 |
45.7 |
127.2 |
578.3 |
12.7 |
13 |
Diesel |
over 2000 |
28.2 |
34.4 |
127.2 |
578.3 |
16.8 |
17 |
|
|
|
|
|
|
|
|
|
LPG |
up to 1400 |
39.1 |
35.2 |
57.1 |
259.6 |
7.4 |
7 |
|
LPG |
1400-2000 |
28.5 |
28.5 |
57.1 |
259.6 |
9.1 |
9 |
LPG |
over 2000 |
22.2 |
20.0 |
57.1 |
259.6 |
13.00 |
13 |
Notes:
- Mean mpg - miles per gallon - from manufacturers information, weighted
by annual sales to businesses (Fleet Audits, 2006).
- Applied mpg - adjusted downwards by 10 per cent to take account of
real driving conditions and lower fuel economy for older cars.
- For LPG, mpg is assumed to be 20 per cent lower than for petrol due
to lower volumetric energy density.
- Department for Business, Enterprise & Regulatory Reform's latest
petrol and diesel prices (26 May 2008), LPG from AA website (May 2008).
Will the rate per mile figures change if fuel prices go up or down?
With effect from the January 2008 change, the rates will be reviewed
twice a year. Any changes will take effect on 1 January and 1 July but
will be published on the HMRC website about one month in advance.
HMRC will also consider changing the rates if fuel prices fluctuate
by 5 per cent from the published rates when each review is made and we
consider the price change will be sustained.
Employers should make themselves aware of any changes by referring to
this page in June and December each year. It is the primary source of
information.
VAT
Customs will also accept the figures in the table for VAT purposes though
employers will need to retain receipts in line with current legislation.
For information of users: This material is published
for the information of clients. It provides only an overview of the regulations
in force at the date of publication, and no action should be taken without
consulting the detailed legislation or seeking professional advice. Therefore
no responsibility for loss occasioned by any person acting or refraining
from action as a result of the material can be accepted by the authors
or the firm.
© Copyright JE Consulting 2008. All
rights reserved.
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