Changes to the advisory fuel rates

The advisory fuel rates allow employers to reimburse employees who drive company cars for their business mileage, tax free. For all journeys undertaken on or after 1 August 2007 the rates will increase.

Other points to note about the advisory fuel rates:

• Employers do not need a dispensation to use these rates.
• Employees driving company cars are not entitled to use them to claim a deduction if employers reimburse them at lower rates. Such claims should continue to be based on actual costs incurred.
• The advisory rates are not binding where an employer can demonstrate that the cost of business travel in company cars is higher than the guideline mileage rates.

If you would like to discuss your company car policy please contact us.