Fuel Rates Down
HMRC announced on 29 Jan that the rates payable for car fuel (where a mileage rate is paid to company car users for business travel) was to be reduced from 1 February 2007.
The mileage rates are payable when an employee uses a company car for business purposes and is reimbursed only for fuel used for business purposes. Using this system provides reimbursement for the employee for business mileage and prevents an assessable benefit in kind arising for fuel benefit, which is chargeable if fuel is provided by the employer for private motoring.
The new rates are:
|
Engine size
|
Petrol
|
Diesel
|
LPG
|
|
Up to 1400cc
|
9p (11p)
|
9p (10p)
|
6p (7p)
|
|
1401-2000cc
|
11p (13p)
|
9p (10p)
|
7p (8p)
|
|
Over 2000cc
|
16p (18p)
|
12p (14p)
|
10p (11p)
|
The changes are meant to take account of the recent falls in fuel prices.
STOP PRESS -According to a release from the Institute of Chartered Accountants, HMRC have agreed that employers would be given a grace period until the end of the month to implement the changes.
The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. Piper Smith Watton cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.