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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:
If you would like to discuss your car policy, please contact us.
Internet Link: HMRC advisory fuel rates