Advisory fuel rates for company cars

New company car advisory fuel rates have been published which took effect from 1 September 2015. Due to the reduction in fuel prices many rates have reduced this quarter so please take care to update your expenses payments. However, the guidance states: 'You can use the previous rates for up to one month from the date the new rates apply'. The rates only apply to employees using a company car.

The advisory fuel rates for journeys undertaken on or after 1 September 2015 are:

Petrol:

Engine size

Pence

1400cc or less 11
1401cc - 2000cc 14
Over 2000cc 21

LPG:

Engine size

Pence

1400cc or less 7
1401cc - 2000cc 9
Over 2000cc 14

Diesel:

Engine size

Pence

1600cc or less 9
1601cc - 2000cc 11
Over 2000cc 13

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 link: Advisory fuel rates

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Bhanot & Co, 1st Floor, 126-128 Uxbridge Road, Ealing, London W13 8QS