A month’s notice used to be given where the advisory fuel rates changed, with the changes not being effective until one month after the announcement was made. The notice period is being withdrawn, with rate changes being able to be implemented with immediate effect.   If rates rise, employers will have to judge whether it is worth making retrospective adjustments to make up the difference.   If the rates fall, HMRC appear to be insisting the employers should recover excess payments from the employees who receive them, although this may be illegal if the rates payable to the employees were a contractual right.   It should be borne in mind that employers are not obliged to apply the advisory rates and can use any amount they think is realistic for the relevant vehicle, provided they can justify it to HMRC.   The new rules will apply from the date that the next advisory fuel rates are announced, late in November 2009.

Posted on 27 Nov 2009