A MAJOR change to fuel rules will start today that could save drivers hundreds of pounds every year.
The new law, rolled out by the HMRC from December 1, will impact anyone who uses a company car.
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Employees who drive petrol and diesel company cars can expect to see a change made to fuel rates when they use the car for private travel.
This change could affect how much motorists pay to stay on the road and whether they need to upgrade their vehicles.
Advisory Fuel Rates are set out by the government to assist businesses in reimbursing or being reimbursed for fuel costs of company cars.
Mileage rates apply when a company must repay an employee for business travel in a company car.
They also apply when an employee must repay the company for personal travel in the company car.
But from today, the advisory fuel rate has been made 1p cheaper.
This is because there will be no added fuel benefit charge for employees using the company car for private travel.
Advisory rates won’t have to be used if the employee shows they have covered the full cost of private fuel by repaying at a lower mileage rate.
Rates are usually reviewed four times a year in March, June, September, and December.
Rates remained largely the same in September, with minor adjustments to cars of certain engine sizes.
Despite this, rates have typically fallen in previous years, meaning drivers paid less to use their company cars.
Petrol cars with engines up to 1,400cc have seen a reduced rate to 12p per mile, while those between 1,401cc and 2,000cc have been reduced to 14p.
Those with vehicles over 2,000cc will pay 23p per mile, a reduction from the previous 26p.
Diesel cars with engines up to 1,600cc will pay a reduced rate of 11p per mile.
Those between 1,601cc and 2,000cc will pay a reduced rate of 13p per mile and over 2,000cc 17p per mile, reduced from 20p.
LPG fuelled cars remain the same across the board with engines up to 1,400cc at 11p, between 1,401cc and 2,000cc at 13p and over 2,000cc at 21p.
All electric vehicles remain at 7p, with hybrid vehicles being categorised as either petrol or diesel cars.
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