| 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
December, 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 December 2009.
|
Engine size |
Petrol |
Diesel |
LPG |
| 1400cc or
less |
11p (10p) |
11p (10p) |
7p (7p) |
| 1401cc –
2000cc |
14p (12p) |
11p (10p) |
8p (8p) |
| Over
2000cc |
20p (18p) |
14p (13p) |
12p (12p) |
HMRC have in the past given employers a
month’s notice of changes to these rates.
However, according to the HMRC guidance:
“After discussions with the relevant
trade bodies, the month's notice
previously given has been withdrawn for
this change. Employers are not obliged to
reimburse their employees for business
fuel at these rates as long as they do not
exceed them overall. Employers making or
collecting payments at the superseded rate
because they have not been able to change
their systems in time may use their
judgement on whether to make or require a
second payment in respect of the same
period in order to apply the new rate from
its effective date. However, employers
should note that under the normal rules,
employees are only able to avoid the car
fuel benefit charge if the amount they
repay in respect of private fuel at least
equals the amounts based on the rates as
published.”
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 |
