Important notice for company car drivers

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As of 1st June 2016, HMRC have updated their Advisory Fuel Rates. The following rates will apply to employees using a company car.

Current Rates:

Engine Size Petrol – amount per mile LPG – amount per mile
1400cc or less 10 pence 7 pence
 1401cc to 2000cc 13 pence 9 pence
 Over 2000cc 20 pence 13 pence

 

Engine Size Diesel – amount per mile
1600cc or less 9 pence
 1601cc to 2000cc 10 pence
 Over 2000cc 12 pence

Hybrid cars are treated as either petrol or diesel cars for this purpose.

When can you use the mileage rates?

Mileage rates only apply when you either:
• reimburse employees for business travel in their company cars
• require employees to repay the cost of fuel used for private travel

Reimburse employees for business travel in their company cars

If you pay a rate per mile less than or equal to the Advisory Fuel Rates for business travel for a certain engine size and fuel type, HMRC will accept there is no taxable profit.

You may use your own rates if these better reflect your circumstances. For example, your company cars may be more fuel efficient. However, if you pay rates greater than the advisory fuel rates, but cannot show the fuel cost per mile is higher, there is no fuel benefit charge if the mileage payments are purely for business miles.

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