HM Revenue and Customs (HMRC) has brought forward the impleme
ntation of new advisory fuel rates.
These new advisory fuel rates can be used from 01 June.
Normally, HMRC issues new rates for use every six months: from 01 January and from 01 July. The announcement is made one month in advance to allow businesses time for implementation.
However, due to the continuing high cost of fuel, HMRC has brought forward the implementation date by one month.
HMRC said in a statement on its website:
“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.”
The advisory fuel rates increase petrol by 1p per mile for under 1400cc engines; and 2p per mile for engine capacity bands 1401cc to 2000cc; and 2000cc and above.
The advisory fuel rates increase diesel by 2p per mile for under 1400cc engines; 2p per mile for 1401cc to 2000cc engines; and by 3p per mile for engines over 2000cc.
“We appreciate that HMRC has acknowledged the extreme financial pressure on many company car drivers who believe that in recent months they have effectively been subsidising their companies’ business mileage,” commented Stewart Whyte, director, Association of Car Fleet Operators.
The advisory fuel rates can be used by businesses to reimburse employees for business travel in their company cars. They can also be used by employees to repay the cost of fuel used for private travel.
The advisory fuel rates are based on engine size and fuel type. If the advisory fuel rates are used they are deemed to be tax-free.
Further information