Changes to the Advisory Fuel Rates from 1 March 2011

25th March 2011

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New company car advisory fuel rates have been published to take effect from 1 March 2011. HMRC’s website states:

‘These rates apply to all journeys on or after 1 March 2011 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.’

The advisory fuel rates for journeys undertaken on or after 1 March 2011 are:

Engine size                   Petrol                  Diesel                  LPG

1400cc or less                14p (13p)             13p (12p)             10p (9p)

1401cc – 2000cc             16p (15p)             13p (12p)            12p (10p)

Over 2000cc                   23p (21p)             16p (15p)            17p (15p)

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 us.

Internet linkHMRC advisory fuel rates

Posted – 25/03/2011