Advisory Fuel Rate change from 1st July 2009
HMRC publish advisory fuel ratesupdated biannually for changes in fuel costs. These rates are used forthe employer to reclaim VAT on mileage expenses paid to the employee.
The VAT reclaimed is the VAT on the advisory mileage rates which are:-
For periods where the VAT rate is 17.5% the VAT Fraction applied tothe rates above is 7/47 and for periods where the VAT rate is 15% thenthe VAT fraction applied is 3/23.
EG. Vehicle of 1399cc Petrol, the advisory fuel rate is 10p and the VAT at 3/23 is 1.304 p per mile.
From 1st July 2009 the new rates will be:-
| Engine size | Petrol | Diesel | LPG |
|---|
| 1400cc or less | 10p | 10p | 7p |
| 1401cc to 2000cc | 12p | 10p | 8p |
| Over 2000cc | 18p | 13p | 12p |
For further information on mileage payments please see our guidance - Mileage Payments.