New tax-free fuel rates for company cars

HMRC have announced the new fuel rates payable to employees without generating a taxable benefit, applicable to employees when they pay for fuel in company cars out of personal funds. It makes sad reading as these compensatory rates are totally insufficient, meaning the employee pays tax on reimbursements of costs when paid back at higher rates. These rates took effect from 1 December 2009.

The rates are as follows:

Engine size	Petrol	Diesel	LPG
1400cc or less	11p	11p	7p
1401cc to 2000cc	14p	11p	8p
Over 2000cc	20p	14p	12p