H M Revenue & Customs has released new advisory fuel rates. These new advisory fuel rates (AFR) replace those in force from 01 January to 30 June 2009.
These advisory fuel rates apply to all journeys made on or after 01 July 2009.
The new AFR rates will not affect drivers of petrol company cars (except those with cars over 2.0-litres where the rate has increased by 1p per mile). But those drivers in diesel company cars have seen their pence per mile claim reduce by 1p in each of the three HMRC bands.
Using the new advisory fuel rates
Firms can use the advisory fuel rates to reimburse staff for the fuel used during business mileage. This applies to drivers of company-owned vehicles.
By using the advisory fuel rates, you will not have to pay tax or National Insurance contributions on them. The advisory fuel rates do not apply to business mileage undertaken in private cars – these payments are the Approved Mileage Allowance Payments (AMAPs). These have remained static at 40p per mile for the first 10,000 miles.
However the new AFR rates are ‘advisory’. You can use a higher figure without paying tax or National Insurance, but only if you can demonstrate to the taxman that the actual cost was higher.
The advisory fuel rates can also be used if you require your company car drivers to repay the cost of fuel used for private travel.
Provided that all of the private mileage has been properly identified, the taxman will not levy fuel benefit charge tax or demand (Class 1A) National Insurance contributions if you use the advisory fuel rates from the table below.
HMRC has said that these figures can be implemented immediately if a business wishes to do so. For hybrid cars, use the petrol figures.
These advisory fuel rates are reviewed twice a year. Any changes are made at the beginning of January and the beginning of July.
Advisory Fuel Rates from July 2009
Engine size
1400cc or less: 10p petrol; 10p diesel; 7p LPG
1401cc to 2000cc: 12p petrol; 10p diesel; 8p LPG
Over 2000cc: 18p petrol; 13p diesel; 12p LPG
These advisory fuel rates replace the rates in use from 01 January 2009. For reference, the former advisory fuel rates were:
Engine size
1400cc or less: 10p petrol; 11p diesel; 7p LPG
1401cc to 2000cc: 12p petrol; 11p diesel; 9p LPG
Over 2000cc: 17p petrol; 14p diesel; 12p LPG
