New advisory fuel rates from 1 March 2011Friday, March 4th, 2011
HMRC reviews the published advisory fuel rates every six months and the new rates, effective from 1 March 2011, are added to the Table below. The rates were not due for review until June 2011 but, in view of the increases in pump prices since December, HMRC gave notice during February that the rates would be reviewed earlier.
Employers may choose to:
- implement the new rates immediately or use the old rates for up to one further month, and
- require employees to make supplementary payments if the new rates cannot be applied immediately, although there is no obligation to do so.
HMRC documents the way in which the rates are calculated. They are based on average fuel consumption for the different engine sizes, reduced by 10% to make the figures more realistic. The fuel prices used are
- petrol – 128.9p per litre (586.1p per gallon)
- diesel – 134.0p per litre (609.4p per gallon)
- LPG – 76.5p per litre (347.8p per gallon).
By way of a reminder, the advisory fuel rates are provided by HMRC for employers to apply where they:
- reimburse employees for business travel in their company cars, or
- require employees to repay the cost of fuel used for private travel in company cars.