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HM Revenue & Customs (HMRC) has published revised Advisory Fuel rates to be used as mileage allowances where an employee is provided with a company car but not with company fuel.

This can be, and usually is, advantageous to the employee who instead of being liable to be taxed on the “benefit in kind” of free fuel unless he or she can prove they paid for their own private fuel is now in a position where there is no fuel-related benefit in kind and so long as they claim only for business mileage at these “advisory” rates there should be no tax issue for them or their employer.

 From the 1st June 2011 until further notice the following rates apply:

  Petrol Engines:  
  1,400cc or less £0.15 per mile
  1,401 to 2,000cc £0.18 per mile
  2,001cc and over £0.26 per mile
     
  Diesel Engines:  
  1,400cc or less £0.12 per mile
  1,401 to 2,000cc £0.15 per mile
  2,001cc and over £0.18 per mile
     
  LPG Vehicles  
  1,400cc or less £0.11 per mile
  1,401 to 2,000cc £0.14 per mile
  2,001cc and over £0.18 per mile

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