Advisory fuel rates for company cars

News: October 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 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 simply reviewed four times a year instead – on 1 March, 1 June, 1 September and 1 December. The rates from 1 September 2011 are as follows, and although they are basically the same as applied from 1 June there is a subtle (and somewhat sneaky) change to diesel powered cars as the advisory rate has been reduced where the engine size is between 1,401 cc and 1,600 cc.

engine size fuel cost per mile
petrol diesel LPG
to 1,400 cc 15p 11p
to 1,600 cc 12p
1,401 to 2,000 cc 18p 13p
1,601 to 2,000 cc 15p
over 2,000 cc 26p 18p 18p