Advisory fuel rates for company cars

News: July 2011

Advisory fuel rates for company cars

Published guidelines are issued by HMRC with the aim being 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 used to be reviewed every 6 months, but more frequently at HMRC’s consideration if fuel prices fluctuated by 5% from the current rate and that was likely to be sustained.

However, that arrangement has changed and the rate per mile is now simply reviewed four times a year instead – on 1 March, 1 June, 1 September and 1 December. The rates from 1 June 2011 are as follows:

engine size fuel cost per mile
petrol diesel LPG
to 1,400 cc 15p 12p 11p
1,401 to 2,000 cc 18p 15p 13p
over 2,000 cc 26p 18p 18p