Advisory fuel rates for company cars

News: April 2011

Advisory fuel rates for company cars

Published guidelines are issued by HMRC. The stated aim is to save time for all concerned by setting out figures which they reckon can be used in the majority of cases.

They are only advisory, and can apply where the employer reimburses the employee for fuel for business travel in a company car or where the employer requires the employee to repay the cost of fuel for private travel in a company car.

They are reviewed every 6 months, but more frequently at HMRC’s consideration if fuel prices fluctuate by 5% from the current rate and that is likely to be sustained. Indeed the 1 December 2010 rates, based on petrol at 119p per litre, were increased from 1 March 2011 as follows in view of the substantial fuel price increases.

They are based on an average petrol price of 128.9p per litre. At the time of writing that already looks too low, so we can expect more increases in the advisory rates.

engine size fuel cost per mile
petrol diesel LPG
to 1,400 cc 14p 13p 10p
1,401 to 2,000 cc 16p 13p 12p
over 2,000 cc 23p 16p 17p