Advisory fuel rates for company cars

New company car advisory fuel rates have been published which took effect from 1 June 2015. Please take care to update your expenses payments and note that only some rates have been amended. 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 June 2015 are:

Petrol

Engine size (cc)

Pence per mile

1400 or less 12
1401 - 2000 14
Over 2000 21

LPG

Engine size (cc)

Pence per mile

1400 or less 8
1401 - 2000 9
Over 2000 14

Diesel

Engine size (cc)

Pence per mile

1600 or less 10
1601 - 2000 12
Over 2000 14

Other points to be aware of about the advisory fuel rates:

  1. 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.
  2. 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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