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Advisory fuel rates
Issue 33 - December 2009
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HMRC have announced that after discussions with the relevant trade bodies, the one month’s notice previously given will be withdrawn when the advisory fuel rates are next announced. Employers making or collecting payments at the superseded rate because they have not been able to change their systems in time should make or require a second payment in respect of the same period in order to apply the new rate from its effective date. The IPP are lobbying against this decision as by not giving employers notice as previously agreed two years ago HMRC will potentially increase the burden on businesses, particularly payroll if they need to calculate retrospective rates.
HMRC recently announced the new advisory fuel rates for company car drivers which came into effect on 1 December 2009. The new rates are as follows, the old rates are in brackets:
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Engine size
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Petrol
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Diesel
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LPG
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1400cc or less
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11p (10p)
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11p (10p)
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7p (7p)
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1401cc to 2000cc
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14p (12p)
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11p (10p)
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8p (8p)
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Over 2000cc
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20p (18p)
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14p (13p)
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12p (12p)
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As these are advisory rates it is up to each employer to decide if they wish to make/recover an additional amount. However where the rates are used to calculate reimbursement for private fuel, failure to increase the reimbursement rate to the new rates will mean that all private fuel has not been reimbursed and a fuel scale charge will arise.