NEW advisory fuel rates have been published by HMRC. The new fuel rates for company cars have risen to take into account the current upward movement in fuel prices.

The rates vary between an additional 1p per mile for a car up to 1.4-litres to 2p per mile for cars over 2.0-litres. The latest company car advisory fuel rates come into effect from December 01. Companies should start paying for business mileage at the revised rates.

Company car drivers who receive free fuel but reimburse private mileage through the advisory fuel rates need to start paying the new rate from December 01, too.

The advisory fuel rates are split into three bands by engine size and by fuel: petrol; diesel; and LPG.

The new rates supersede those in force from July 01 2009.

"Employers are not obliged to reimburse their employees for business fuel at these rates as long as they do not exceed them overall," commented HMRC, but warned that "employees are only able to avoid the car fuel benefit charge if the amount they repay in respect of private fuel at least equals the amounts based on the rates as published."

The new rates are as follows.

Advisory Fuel Rates from December 2009

Engine size
1400cc or less:11p (petrol); 11p (diesel); 7p (LPG)
1401cc to 2000cc: 14p (petrol); 11p (diesel); 8p (LPG)
Over 2000cc: 20p (petrol); 14p (diesel); 12p (LPG)

Further information

More detailed information about the advisory fuel rates can be found in our Law & Tax section Tax: new advisory fuel rates for business mileage - December 09