| 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 |
