Online
News - Business News - Date: July
2008
Advisory Fuel Rates
To reflect the increases in fuel prices,
HMRC have issued new advisory fuel rates for employees
driving employer provided cars. These take effect
for all journeys undertaken from 1 July 2008 so employers
wishing to use the new rates should advise affected employees
and update any expense forms as soon as possible.
Engine size |
Petrol |
Diesel |
LPG |
1400cc or less |
12p (11p) |
13p (11p) |
7p (7p) |
1401cc – 2000cc |
15p (13p) |
13p (11p) |
9p (8p) |
Over 2000cc |
21p (19p) |
17p (14p) |
13p (11p) |
HMRC are supposed to give employers a month’s notice
of changes the Advisory Fuel Rates (AFR). However according
to the HMRC guidance:
‘the recent fuel price increases which justify these AFR changes have
happened very rapidly. In these unusual circumstances we are mindful that an
implementation date of 1 July might mean that drivers will be incurring higher
fuel prices before the new rates become effective. Consequently, where employers
are able to do so, HMRC is content for the new rates to be implemented immediately
ie from 1 June.’
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 them to claim a deduction if employers reimburse
them at lower rates. Such claims should be based on 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
For further information, please contact us
on +44 113 389 6200 or email enquiries@kirknewsholme.co.uk
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