Author: Matt Morton
IF you’ve been wondering what sort of black hole your fuel tank has become, then there is welcome relief from HMRC.
Recognising the record rates for the cost of diesel at the fuel pumps – average diesel prices shot up to 144p per litre during February – H M Revenue & Customs has upped the company car mileage rate you can claim for your business car.
As long as it’s diesel.
HMRC has changed the Advisory Fuel Rates for diesel cars, increasing the rate for sub-1.6-litre diesel company cars by 1p per mile to 13p, and raising the top band for over 2.0-litre cars by 1p per mile to 19p.
Bad news if you drive a diesel company car in the middle: no change – it stays at 15p per mile.
It’s also bad news if your company car is petrol; HMRC has kept the pence per mile rates as for the previous quarter. Drivers will feel particularly aggreived since petrol hit a new cost high, according to the AA, of 137.44p a litre on 2 March 2012.
HMRC revises the company car fuel cost rates every quarter. which can be claimed to avoid benefit in kind tax on fuel. The Advisory Fuel Rates (AFRs) should be used for all fuel claims from 01 Match 2012.
Advisory Fuel Rates from 01 March 2012 for petrol and LPG cars
- Engine size 1400cc or less: 15p (petrol); 10p (LPG)
- 1401cc to 2000cc: 18p (petrol); 12p (LPG)
- Over 2000cc: 26p (petrol); 18p (LPG)
Advisory Fuel Rates from 01 March 2012 for diesel cars
- Engine size 1600cc or less: 13p
- 1601cc to 2000cc: 15p
- Over 2000cc: 19p
These advisory fuel rates replace the rates that were available for use from the beginning of December 2011.
However, if you are a business car manager or SME director responsible for small fleet company car management, the new rates don’t have to be used straight away.
“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,” says HMRC.
Read more on Advisory Fuel Rates
What are they? When can you use them? And what for? Go here Tax: Company car business mileage rates
