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New Advisory Fuel Rates

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Newsletter issue - January 08.

Where you pay a mileage allowance to your company car drivers to compensate for the cost of fuel used on business journeys, those payments can be paid tax free if they fall within certain limits. These limits are called advisory fuel rates and are set by the Taxman every few months. The new mileage rates that apply from 1 January 2008 are:

Engine size:PetrolDiesel LPG
1400cc or less11p11p7p
1401 to 2000cc13p11p8p
Over 2000cc19p14p11p

These mileage rates are advisory and are not set down in law. If your vehicle fleet has special features which means it is less fuel efficient that the average car, you can agree different advisory rates with your local tax office.