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Changes to the advisory fuel rates from 1 December 2010 

To reflect the increase in fuel prices, HMRC have issued new advisory fuel rates for employees driving employer provided cars. These take effect for all journeys undertaken from 1 December, so employers using the advisory rates should advise affected employees and update any expense forms as soon as possible.

The advisory fuel rates may be used for journeys undertaken on or after 1 December 2010.

According to the HMRC website:

These rates apply to all journeys on or after 1 December 2010 until further notice, allowing them to reflect fuel prices more quickly. For one month from the date of change, employers may use either the previous or new current rates, as they choose. Employers may therefore make or require supplementary payments if they so wish, but are under no obligation to do either.

Other points to be aware of about the advisory fuel rates:

• Employers do not need a dispensation to use these rates.
• Employees driving employer provided cars are not entitled to use these rates to claim tax relief if employers reimburse them at lower rates. Such claims should be based on the actual costs incurred.
• The advisory rates are not binding where an employer can demonstrate that the cost of business travel in employer provided cars is higher than the guideline mileage rates. The higher cost would need to be agreed with HMRC under a dispensation.

New Showroom Tax – April 2010

What changes are being made to vehicle tax from April 2010?

Vehicle tax rates for cars registered on or after 1st March 2001 are split into 13 bands depending on CO2 emissions.  The amount you will pay depends on which band your car comes under.

From April 2010 there will be different Vehicle Tax rates for new cars when they are first registered.  These are known as ‘first-year rates’ or ‘Showroom Taxes’.  Standard rates of Vehicle Tax will also change in April 2010.

What are the ‘first-year rates’?

From April 2010 anyone buying a new car will pay a different rate of Vehicle Tax for the first tax disc.  From the second tax disc onwards they will then pay the standard rate.  This is designed to send a stronger signal to the buyer about the environmental implications of their car purchase and will only apply to new cars, not already registered cars.

What about already registered cars?

From April 2010, already registered higher emitting cars will be charged up to £30.00 more and lower emitting cars will be charged up to £30.00 less.

*Band K includes cars that have a CO2 figure over 225g/km but were registered before 23 March 2006.

Co2 Percentage table