HM Revenue & Customs (HMRC) is to increase the advisory fuel rates for company car drivers from August 1 so that they fall in line with rises in fuel costs.
The move means that employers will now be able to reimburse drivers in large petrol 2000cc company cars that pay for their own fuel, 18p per mile on a tax-free basis. This is a hike from the 16p level set in February this year.
According to one provider the move will only encourage more employees to drive large ‘gas-guzzler’ cars, and goes against the government’s long-term plan to promote green driving among fleets.
Paul Jackson, managing director at The Miles Consultancy said: “If you have a 3 litre Jaguar at 18p a mile it’s good money so it’s daft, it is completely flying in the face of the CO2 argument, it’s just wrong.”
Drivers in less polluting1400cc petrol cars will be reimbursed 10p from August, which is again a rise from 9p.