Company Car Tax Guide

Company Cars Advisory Fuel Rates from 1 July 2006

These rates apply to all journeys on or after 1 July 2006 until further notice:

Engine Size Petrol Diesel LPG
1400cc or less 11p 10p 7p
1401cc to 2000cc 13p 10p 8p
Over 2000cc 18p 14p 11p

These rates are calculated from the fuel prices in the table below:

Fuel
Engine Size
(cc)
Mean
MPG
Applied
MPG
Fuel price
(per litre)
Fuel price
(per gallon)
Pence
per mile
AFR
Petrol
up to 1400 45.5 41.0 96.4 438.4 10.7 11
Petrol
1400 – 2000 37.1 33.4 96.4 438.4 13.1 13
Petrol
over 2000 27.1 24.4 96.4 438.4 18.0 18
 
Diesel
up to 2000 50.7 45.6 98.8 449.3 9.8 10
Diesel
Over 2000 34.9 31.4 98.8 449.3 14.3 14
 
LPG
up to 1400 n/a 32.8 46.9 213.1 6.5 7
LPG
1400 – 2000 n/a 26.7 46.9 213.1 8.0 8
LPG
over 2000 n/a 19.5 46.9 213.1 10.9 11

Notes:

  1. Mean mpg – miles per gallon – from manufacturers information, weighted by annual sales to businesses (Society of Motor Manufacturers and Traders (SMMT), 2004).
  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 (June 2006), LPG from AA website (June 2006), both adjusted to include change in fuel duty announced to take effect in September 2006.

Will the rate per mile figures change if fuel prices go up or down?

We aim to provide employers with as much certainty as possible by keeping the fuel rates unchanged where there are modest variations in fuel prices. In line with the commitment made when they were introduced, they will be reviewed during a tax year only in the event of a variation in fuel prices of greater than 10% from the prices used at that time.

VAT

Customs will also accept the figures in the table for VAT purposes though employers will need to retain receipts in line with current legislation.

This Company Car Tax Guide – Crown Copyright © 2012

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