Advisory fuel rates for company cars - New rates apply from 1 February 2007

HMRC’s advisory fuel rates are used by employers to negotiate dispensations for mileage payments for business travel in company cars. The rates only apply where employers:

• reimburse employees for business travel in their company cars, or
• require employees to repay the cost of fuel used for private travel.

The rates are based on the fuel cost per mile for the most popular fleet cars. They were introduced from January 2002 and were adjusted to reflect increased fuel costs in April 2004, July 2005 and July 2006.

As a result of the recent general reductions in car fuel prices, HMRC has reviewed the advisory fuel rates again and the changes from 1 February 2007 are shown in the following table:

HMRC has documented the way in which the rates have been calculated. They are based on average miles per gallon for the different engine sizes, reduced by 10% to give more realistic fuel consumption figures. The fuel prices used are

• petrol - 86.3 p per litre (392.2p per gallon
• diesel - 90.5p per litre (411.2p per gallon)
• LPG - 45.5 p per litre (206.9p per gallon).

...UK Payroll News - Latest

Further information:
Company Cars - Advisory Fuel Rates for Company Cars
Company Cars - Advisory Fuel Rates for Company Cars from 1 July 2006
Company Cars - Advisory Fuel Rates for Company Cars – earlier rates

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