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HMRC has published the new advisory fuel rates effective from 1 September 2011. However, the new rates have stayed exactly the same as those announced in June 2011 apart from a 1p per mile decrease for LPG fuelled cars with an engine size from 1401cc to 2000cc.
The advisory fuel rates are intended to reflect actual average fuel costs at the time they are set. They give employers more certainty about what the mileage rates that they choose to apply mean for tax and NICs. Customs will also accept the figures for VAT purposes.
The below tables summarises the new rates and the associated amounts of VAT that can be reclaimed.
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Petrol
cost/mile
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VAT
(per mile)
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LPG
cost/mile
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VAT
(per mile)
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| Engine Sizes |
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| 1400cc or less |
15p |
2.50p |
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11p |
1.83p |
| 1401cc - 2000cc |
18p |
3.00p |
|
12p |
2.00p |
| over 2000cc |
26p |
4.33p |
|
18p |
3.00p |
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Diesel
cost/mile
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VAT
(per mile)
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| Engine Sizes |
|
|
| 1600cc or less |
12p |
2.00p |
| 1600cc - 2000cc |
15p |
2.50p |
| over 2000cc |
18p |
3.00p |
Points to note
• For the month of September only, businesses have the choice of using either the new or the previous rates.
• The rates are now being reviewed four times a year with changes taking effect at the beginning of each calendar quarter, so the next potential changes will be on 1 December 2011.
• The engine size categories for diesel cars have changed this quarter (previously the categories were in line with petrol and LPG cars).
• For previous rates go to: http://www.hmrc.gov.uk/cars/advisory_fuel_archive.htm
How can Hazlewoods help?
We can provide advice about how the changes affect your business and can also help you negotiate dispensations with HMRC for mileage payments for business travel in company cars.
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