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Company cars

Company cars - advisory fuel rates from 1 June 2010

These rates apply to all journeys on or after 1 June 2010 until further notice, allowing them to reflect fuel prices more quickly. For one month from the date of change, employers may use either the previous or new current rates, as they choose. Employers may therefore make or require supplementary payments if they so wish, but are under no obligation to do either.

Engine Size	Petrol	Diesel	LPG
1400cc or less	12p	11p	8p
1401cc to 2000cc	15p	11p	10p
Over 2000cc	21p	16p	14p

Petrol hybrid cars are treated as petrol cars for this purpose.

These rates are calculated from the fuel prices in the tables below:

Fuel	Engine Size (cc)	Mean MPG	Applied MPG	Fuel Price (per litre)	Fuel Price (per gallon)	Pence per mile	AFR
Petrol	up to 1400	49.3	44.4	119.9	545.2	12.3	12
Petrol	1400-2000	41.2	37.1	119.9	545.2	14.7	15
Petrol	over 2000	28.8	25.9	119.9	545.2	21.0	21
Diesel	up to 2000	54.3	48.8	121.9	554.3	11.4	11
Diesel	over 2000	39.4	35.4	121.9	554.3	15.6	16
LPG	up to 1400	39.4	35.5	65.4	297.3	8.4	8
LPG	1400-2000	33.0	29.7	65.4	297.3	10.0	10
LPG	over 2000	23.0	20.7	65.4	297.3	14.3	14

Notes:

1. Mean mpg - miles per gallon - from manufacturers information, weighted by annual sales to businesses (Fleet Audits, 2008).
2. Applied mpg - adjusted downwards by 10 per cent to take account of real driving conditions and lower fuel economy for older cars.
3. For LPG, mpg is assumed to be 20 per cent lower than for petrol due to lower volumetric energy density.
4. Department for Business, Innovation & Skill's latest petrol and diesel prices (24 May 2010), LPG from AA website (May 2010).

Will the rate per mile figures change if fuel prices go up or down?

The rates are reviewed twice a year. Any changes will take effect on 1 June and 1 December and will be published on the HM Revenue & Customs (HMRC) website shortly before the date of change.

HMRC will also consider changing the rates if fuel prices fluctuate by 5 per cent from the published rates when each review is made and we consider the price change will be sustained.

Employers should make themselves aware of any changes by referring to this page in late May and November each year. It is the primary source of information.

VAT

Customs will also accept the figures in the table for VAT purposes though employers will need to retain receipts in line with current legislation.

© Copyright JE Consulting 2010. All rights reserved.

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