The new advisory fuel rates for company car drivers, which HMRC originally announced would be effective from 1 February 2007, were published at such short notice that they have now agreed a transitional period for employers to implement the necessary changes to their expense systems.
Where employers have practical difficulties implementing the new lower rates they can continue to use the older higher rates for a further month, i.e. to 28 February 2007, without having to take account of the income tax, NIC and VAT implications of paying allowances at the higher rate. This will allow time for drivers and employers to adjust to the new rate.
This treatment will extend to those employers with dispensations for fuel rates which are linked, usually by a formula, to advisory fuel rates.
Employers can however use the new lower rate with effect from 1 February for employees with fuel cards who reimburse their employers for private fuel bought with a company fuel card.
The new rates are as follows:
| Engine size | Petrol | Diesel | LPG |
| 1400cc or less | 9p | 9p | 6p |
| 1401 to 2000cc | 11p | 9p | 7p |
| Over 2000cc | 16p | 12p | 10p |
Link
HMRC Company Cars - Advisory Fuel Rates for Company Cars from 1 February 2007
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