Changes to the Revenue's Advisory Fuel Rate

4th January 2011

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Changes to the advisory fuel rates from 1 December 2010

To reflect the increase in fuel prices, HMRC have issued new advisory fuel rates for employees driving employer provided cars. These take effect for all journeys undertaken from 1 December, so employers using the advisory rates should advise affected employees and update any expense forms as soon as possible.

The advisory fuel rates may be used for journeys undertaken on or after 1 December 2010.

Engine size	Petrol	Diesel	LPG
1400cc or less	13p (12p)	12p (11p)	9p (8p)
1401cc – 2000cc	15p (15p)	12p (11p)	10p (10p)
Over 2000cc	21p (21p)	15p (16p)	15p (14p)

According to the HMRC website:

These rates apply to all journeys on or after 1 December 2010 until further notice, allowing them to reflect fuel prices more quickly. For one month from the date of change, employers may use either the previous or new current rates, as they choose. Employers may therefore make or require supplementary payments if they so wish, but are under no obligation to do either.

Other points to be aware of about the advisory fuel rates:

Employers do not need a dispensation to use these rates.
Employees driving employer provided cars are not entitled to use these rates to claim tax relief if employers reimburse them at lower rates. Such claims should be based on the actual costs incurred.
The advisory rates are not binding where an employer can demonstrate that the cost of business travel in employer provided cars is higher than the guideline mileage rates. The higher cost would need to be agreed with HMRC under a dispensation.

If you would like to discuss your car policy, please contact Wallace Crooke on 01922 612287, or for furthur information please see our website