Latest Accountancy News - July 2009

Advisory Fuel Rates

To reflect the changes in fuel prices, HMRC have issued new advisory fuel rates for employees driving employer provided cars.  These take effect for all journeys undertaken from 1 July 2009 so employers wishing to use the new rates should advise affected employees and update any expense forms as soon as possible.

Employers may use the new rates prior to 1 July if their systems allow. The rates in brackets are those previously applicable.

Other points to be aware of about the advisory fuel rates:

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

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

Internet link: HMRC advisory fuel rates