Error parsing XSLT file: \xslt\FacebookOpenGraph.xslt TAX LATEST: HMRC issues new advisory fuel rates (Jan 2008)
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TAX LATEST: HMRC issues new advisory fuel rates (Jan 2008)

Date: 03 December 2007

Cars running on modern petrol have a lower list price than diesel equivalents

As promised by HMRC two weeks ago, new Advisory Fuel Rate (AFR) figures have been issued, one month ahead of their implementation.

AFRs cover fuel-only payments for company car drivers on work business.

Responding to pressure from the business car industry, particularly from ACFO, HMRC has promised to review rates on a six monthly basis and if there has been significant change in fuel prices adjust the AFRs.

The new figures set to come into operation on 1 January 2008 see a rise of 1p in the 1400cc or less and over 2000cc categories for all fuels, but remain unchanged for vehicles above 1400cc up to and including 2000cc.

Figures for the 1401 to 2000cc categories are unchanged because of 'rounding-up'.

Advisory Fuel Rates (1 Jan 2008 until further notice)
Engine SizePetrolDieselLPG
1400cc or less11p11p7p
1401cc to 2000cc13p11p8p
Over 2000cc19p14p11p

HMRC Notes:

1. Mean mpg - miles per gallon - from manufacturers information, weighted by annual sales to businesses (Society of Motor Manufacturers and Traders (SMMT), 2005).

2. Applied mpg - adjusted downwards by 10% to take account of real driving conditions and lower fuel economy for older cars.

3. For LPG, mpg is assumed to be 20% lower than for petrol due to lower volumetric energy density.

4. Department of Trade & Industry's latest petrol and diesel prices (November 2007), LPG from AA website (October 2007).

How AFRs are calculated
FuelEngine (cc)Mean mpgApplied mpgFuel price (per litre)Pence per mileAFR
Petrolup to 140046.742.0102.111.010
Petrol1400 - 200038.534.7102.113.413
Petrolover 200027.925.1102.118.519
Dieselup to 200050.345.3106.310.711
DieselOver 200037.533.7106.314.314
LPGup to 140037.433.650.26.87
LPG1400 - 200030.827.750.28.28
LPGover 200022.320.150.211.411