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Company Cars

Advisory Fuel Rates for Company Cars from 1 January 2008

These rates apply to all journeys on or after 1 February 2008 until further notice:

Engine Size	Petrol	Diesel	LPG
1400cc or less	11p	11p	7p
1401cc to 2000cc	13p	11p	8p
Over 2000cc	19p	14p	11p

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	46.7	42.0	102.1	464.3	11.0	11
Petrol	1400-2000	38.5	34.7	102.1	464.3	13.4	13
Petrol	over 2000	27.9	25.1	102.1	464.3	18.5	19
Diesel	up to 2000	50.3	45.3	106.3	483.0	10.7	11
Diesel	over 2000	37.5	33.7	106.3	483.0	14.3	14
LPG	up to 1400	37.4	33.6	50.2	228.2	6.8	7
LPG	1400-2000	30.8	27.7	50.2	228.2	8.2	8
LPG	over 2000	22.3	20.1	50.2	228.2	11.4	11

Notes:

1. Mean mpg - miles per gallon - from manufacturers information, weighted by annual sales to businesses (Society of Motor Manufacturers and Traders (SMMT), 2005).
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 of Trade & Industry's latest petrol and diesel prices (November 2007), LPG from AA website (October 2007).

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

With effect from the January 2008 change, the rates will be reviewed twice a year. Any changes will take effect on 1 January and 1 July but will be published on the HMRC website about 1 month in advance.

HMRC will also consider changing the rates if fuel prices fluctuate by 5 per cent during each six month period.

Employers should make themselves aware of any changes by referring to this page regularly. It is the primary source of information because it can be updated quickly if necessary.

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.

For information of users: This material is published for the information of clients. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material can be accepted by the authors or the firm.

© Copyright JE Consulting 2008. All rights reserved.

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