HMRC has announced the latest changes to the advisory fuel rates for company cars. What are they and when can you apply them from?
The rate you can pay employees for business mileage in their own vehicles is relatively well-known – 45p per mile for the first 10,000 miles and 25p per mile thereafter. However, it’s also possible to pay drivers of company-owned vehicles an approved rate for business mileage. These are less generous than those discussed above because they do not include an amount in respect of wear and tear, repairs, etc. They change every quarter, so it’s important to keep an eye on the latest rates. If you pay an amount above the advisory rate by mistake, it could lead to a benefit in kind charge for the employee.
The latest rates published will apply from 1 December 2020, though you can continue to use the previous rates until 31 December 2020 if you wish. The new rates are as follows (previous rate shown in brackets if different):
|1,400 cc or less||10p||7p|
|1,600 cc or less||8p|
|1,401cc – 2,000cc||11p (12p)||8p|
|1,601cc to 2,000 cc||10p|
|Over 2,000 cc||17p||12p||12p|
What to do next
For further information on this and other topics contact Tony on 07974-418819 or email at email@example.com or through the contact page of the website http://www.milestone-solutions.co.uk