New fuel advisory rates from 1st August 2007

HMRC announced on 27 June that the advisory fuel rates for company cars will increase from 1 August 2007. The announcement is in line with the agreement reached with HMRC earlier this year to give one month’s notice of any changes (this followed HMRC’s announcement on 1 February 2007 of rates intended to apply from that date, which brought forth a lot of protest from the profession and employers).

 
The new rates applying to all journeys on or after 1 August 2007 are (with existing rates in brackets):
 
Engine Size Petrol Diesel LPG
       

1,400cc or less

10p (9p)

10p (9p)

6p (6p)

1,401cc to 2,000cc

13p (11p)

10p (9p)

8p (7p)

Over 2,000cc

18p (16p)

13p (12p)

10p (10p)

 

 

Advisory fuel rates are the guideline rates at which employers can reimburse employees for business travel in their company cars, or require employees to repay the cost of fuel used for private travel in company cars, without tax or NIC implications.
 
In its news item HMRC also notes that:
 
We aim to provide employers with as much certainty as possible by keeping the fuel rates unchanged where there are modest variations in fuel prices. In line with commitment made when they were introduced, they will be reviewed during a tax year only in the event of a variation in fuel prices of greater than 10 per cent from the prices used at that time.

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