Where an employer pays an employee’s car fuel, the employee will only be able to avoid the car fuel benefit charge if the amount they then repay the employer in respect of private fuel at least equals the amount published under the advisory fuel rates.

The following rates apply to all journeys on or after 1 December 2009 until further notice:

1400cc or less:
Petrol: 11p
Disel: 11p
LPG: 7p

1401cc to 2000cc
Petrol: 14p
Diesel: 11p
LPG: 8p

Over 2000cc
Petrol: 20p
Diesel: 14p
LPG: 12p

As mentioned in our article PAYE - Advisory Fuel Rates the one month notice period no longer applies and these rates are effective immediately.

HMRC remind employers that they are not obliged to reimburse their employees for business fuel used at these rates as long as they do not exceed them overall.  Employers making or collecting payments at the superseded rate because they have not been able to change their systems in time may use their judgement on whether to make or require a second payment in respect of the same period in order to apply the new rate from its effective date.

The amounts can be used for VAT purposes, but employers will need to retain receipts.

Posted on 11 Dec 2009