Tax & Accounting News

Company Car Fuel Only Mileage Rate Increases

13/06/2008

The taxman is giving company car drivers a little early relief from the effect of rising fuel prices.

HM Revenue & Customs’ (HMRC) advisory fuel rates – the HMRC guidelines on fuel-only mileage rates for company cars – will officially rise from 1 July.

But HMRC has acknowledged that drivers are already feeling the effect of higher fuel prices by saying that where employers are able to do so, it is happy for the new rates to apply from 1 June.

From January 2008, rates are to be reviewed twice a year, with changes taking effect on 1 January and 1 July. Employers should check the HMRC website at www.hmrc.gov.uk/cars/advisory_fuel_current.htm during December and June each year, as the new rates will be published about one month in advance of each review.

HMRC has also said it will consider changing the advisory fuel rates if fuel prices fluctuate by five per cent from the published rates when each review is made and it considers that the price change is likely to continue.

The new rates (with the previous rates in brackets) are:

Engine size	Petrol	Diesel	LPG
1400cc or less	12p (11p)	13p (11p)	7p (7p)
1401 - 2000cc	15p (13p)	13p (11p)	9p (8p)
Over 2000cc	21p (19p)	17p (14p)	13p (11p)

Petrol hybrid cars are treated as petrol for fuel advisory rate purposes.

 

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