Tag: Fuel Rate

Car Business Mileage Rates have gone up – what are they now?

These changes only affect the fuel only rates, the business mileage rates are unchanged

Tax: rates per business mile

First 10,000 milesAbove 10,000 miles
Cars and vans45p (40p before 2011 to 2012)25p
Motorcycles24p24p
Bikes20p20p

Its the Approved Mileage Rates that keep changing

From 1 September 2021

You can use the previous rates for up to 1 month from the date the new rates apply.

Engine sizePetrol – rate per mileLPG – rate per mile
1400cc or less12 pence7 pence
1401cc to 2000cc14 pence8 pence
Over 2000cc20 pence12 pence
Engine sizeDiesel – rate per mile
1600cc or less10 pence
1601cc to 2000cc12 pence
Over 2000cc15 pence

From 1 June 2021 to 31 August 2021

Engine sizePetrol – rate per mileLPG – rate per mile
1400cc or less11 pence8 pence
1401cc to 2000cc13 pence9 pence
Over 2000cc19 pence14 pence
Engine sizeDiesel – rate per mile
1600cc or less9 pence
1601cc to 2000cc11 pence
Over 2000cc13 pence

1 March 2021 to 31 May 2021

Engine sizePetrol – rate per mileLPG – rate per mile
1400cc or less10 pence7 pence
1401cc to 2000cc12 pence8 pence
Over 2000cc18 pence12 pence
Engine sizeDiesel – rate per mile
1600cc or less9 pence
1601cc to 2000cc11 pence
Over 2000cc12 pence

1 December 2020 to 28 February 2021

Engine sizePetrol – rate per mileLPG – rate per mile
1400cc or less10 pence7 pence
1401cc to 2000cc11 pence8 pence
Over 2000cc17 pence12 pence
Engine sizeDiesel – rate per mile
1600cc or less8 pence
1601cc to 2000cc10 pence
Over 2000cc12 pence

For hybrid cars you must use the petrol or diesel rate which may differ significantly from the actual fuel costs. The advisory electricity rate for fully electric cars is 4 pence per mile.

Employees should carefully consider whether it is advantageous having private fuel provided for their company car.  Remember that the P11d benefit for having private fuel provided for a company car in 2021/22 is £24,600 multiplied by the CO2 emissions percentage for that vehicle.

For example, a director driving a Mercedes Benz E200 saloon company car (CO2 emissions 169g per km) would be assessed on 37% = £9,102 for 2020/21. If they are a higher rate taxpayer that would mean £3,641 tax. That is an awful lot of private fuel!

steve@bicknells.net

Falling HMRC Fuel Rates – are your claims right?

mann im auto

The 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

If you pay a rate per mile for business travel no higher than the AFR, for the particular engine size and fuel type, HM Revenue and Customs (HMRC) will accept there is no taxable profit and no Class 1A National Insurance to pay.

You can use your own rates which better reflect your circumstances if, for example, your cars are more fuel efficient, or if the cost of business travel is higher than the guideline rates.

Advisory Fuel Rates from 1 March 2015

These rates applied from 1 March 2015. You can use the previous rates for up to 1 month from the date the new rates apply.

Engine size Petrol – amount per mile LPG – amount per mile
1400cc or less 11p 8p
1401cc to 2000cc 13p 10p
Over 2000cc 20p 14p
Engine size Diesel – amount per mile
1600cc or less 9p
1601cc to 2000cc 11p
Over 2000cc 14p

 

COMPANY car mileage rates have been slashed by up to 18% as HMRC cut the tax allowance across all six of the petrol and diesel categories in response to continuing fuel price falls.

Hardest hit by the rates, known as advisory fuel rates (AFR), are drivers of company cars with petrol engines greater than 1,401cc which have suffered a 3p cut in rates applicable from 1 March.

Business Car Manager

steve@bicknells.net

 

How to claim VAT back using Fuel Advisory Rates

Mileage for the current tax year can be reclaimed at a maximum  of 45p per mile for the first 10000 miles then 25p after that

http://www.hmrc.gov.uk/rates/travel.htm

Most people are already using these rates, but a large number of businesses don’t reclaim the VAT on the Fuel element – see VAT Notice 700/64

8.7 My employees are paid a mileage allowance, how do I work out my input tax?

You work out your input tax by multiplying the fuel element of the mileage allowance by the VAT fraction. You can do this for all fuel bought

The allowance paid to employees must be based upon mileage actually done.

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_ShowContent&id=HMCE_CL_000090&propertyType=document#P159_17774

 

Company cars: advisory fuel rates
The rates below apply from 1 December 2011.

Engine size

Petrol

LPG
1400cc or smaller 15p 10p
1401cc to 2000cc 18p 12p
Bigger than 2000cc 26p 18p

Engine size

Diesel
1600cc or smaller 12p
1601cc to 2000cc 15p
Bigger than 2000cc 18p

So this is how to work out the claim:

1000 business miles = 1000 x 45p = £450

On which VAT (assuming a 2000cc (bigger) Diesel) 1000 miles x 18p divided by 1.2 x 20% VAT = £30 VAT to reclaim

For large businesses there could be a lot of VAT to reclaim

steve@bicknells.net