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Changes to the advisory fuel rates from 1 December 2009

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 14p (12p) 11p (10p) 8p (8p)
1401cc – 2000cc 11p (10p) 11p (10p) 7p (7p)
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"After discussions with the relevant trade bodies, the month's notice previously given has been withdrawn for this change.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 Employers making or collecting payments at the superseded rate because they have not been able to change their systems in time may use their judgement on whether to make or require a second payment in respect of the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:

If you would like to discuss your car policy, please contact us.

Internet Link: HMRC advisory fuel rates

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