Advisory fuel rates for company cars
HMRC have announced that new advisory fuel rates take effect from 1 June 2011. HMRC have also announced that the fuel rates will now be reviewed four times a year with changes to take effect on 1 March, 1 June, 1 September and 1 December. Due to the increased review time, HMRC’s previous policy whereby the rate could change if fuel prices fluctuated by 5% or more is to be withdrawn.
The rates below apply from 1 June 2011. For one month from the date of change, employers may use either the previous or new current rates, as they choose. Employers making or collecting payments at the superseded rate may use their judgement on whether to make or require a second payment in respect of the same period in order to apply the new rate from its effective date.
|1400cc or less||15p||11p|
|1401cc to 2000cc||18p||13p|
|1600cc or less||12p|
|1601cc to 2000cc||15p|
Employers should note that under the normal rules, employees are only able to avoid the car fuel benefit charge if the amount they repay in respect of private fuel at least equals the amounts based on the published rates.
Petrol hybrid cars are treated as petrol cars for this purpose. The figures can also be used for VAT purposes although businesses also need to retain fuel receipts.