Company cars get early fuel rate increase

Employers operating company cars can now, if they are able, pay their employees higher fuel rates a month earlier than normal.

HM Revenue & Customs (HMRC) looks at possible changes twice a year in the amount that employees can claim on business journeys.

Given the dramatic rise in petrol prices, however, HMRC has said that increases in the advisory fuel rates that are due to come into effect as from 1 July can be claimed as from 1 June.

The move is intended to help employees deal with the rapid hikes in petrol prices.

In its statement, HMRC said: “In these unusual circumstances we are mindful that an implementation date of 1 July might mean that drivers will be incurring higher fuel prices before the new rates become effective. Consequently, where employers are able to do so, HMRC is content for the new rates to be implemented immediately, ie from 1 June.”

The rates themselves have increased by varying amounts depending on the size of engine and the type of fuel used.

For petrol, the rates have climbed by between 9 per cent and 15 per cent, while for diesel the increase has been between 18 per cent and 21 per cent.

HMRC can alter fuel rates on a more regular basis should fuel prices rise (or fall) by more than 5 per cent.

More details are available at http://www.hmrc.gov.uk/cars/advisory_fuel_current.htm