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New Company Car Advisory Fuel Rates

01 - 12 - 2011

The HMRC company car advisory fuel rates are changing as of 1 December 2011

What are company car advisory fuel rates?
These are the rates at which HMRC calculate that an employee driving a car supplied by his employer will cover his fuel costs for business miles driven.

 
 
When are the rates applicable?
Where an employee drives a company car but pays for all of the fuel themselves they can claim miles driven in the course of business at the relevant advisory fuel rates

 
 
What are the rates?
Engine size                                              Petrol                                       LPG
1400cc or less                                          15p                                          10p
1401cc to 2000cc                                     18p                                          12p
Over 2000cc                                              26p                                          18p

 
 
Engine size                                               Diesel
1600cc or less                                           12p
1601cc to 2000cc                                      15p
Over 2000cc                                               18p

 
 
What if I have a hybrid car?
Petrol hybrid cars are treated as petrol cars for this purpose.

 
 
When do these rates change?
The rates are reviewed quarterly. Any changes will take effect on 1 March, 1 June, 1 September and 1 December and will be published on the HM Revenue & Customs (HMRC) website shortly before the date of change.
 
 
 Is there a transition period?
Yes. HMRC allow a one month transition period when either the old or new rate can be applied.
 
 
 Why are the rates lower than for the employees own car?
The advisory rates for personal cars are higher as they allow for a contribution towards running costs. A company car is owned by the company and the company should, therefore, pay all the running costs.

 
 
Will the rate per mile figures change if fuel prices go up or down?
Since the rates are now reviewed quarterly HMRC will no longer consider changing the rates if fuel prices fluctuate by 5 per cent from the published rates.

 
 
Looking for further information? Call Foremans LLP on 01244 625 500.

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