Milage Rates Update
HM Revenue and Customs has published updated advisory mileage rates which take immediate effect.
The rates allow the employer to pay employees a set amount per mile when using a company car for business mileage, free of tax and national insurance contributions.
Following the changes employers can now pay 10 pence per mile for petrol vehicles with an engine under 1400cc, 13p for 1401cc to 2000cc engines or 18p for those over 2000cc. Diesel car rates are 10p, 10p and 13p respectively.
One of our Partners, Robin John comments: “These updates keep the tax free rates rise in line with petrol prices in the UK.
“Employers who provide their staff with a company car can now choose whether to pay employees these rates for their business miles, or alternatively the company can cover the cost of all the petrol and charge the employee for private mileage.
“While company cars are not as popular as they used to be, they are still a common benefit and the changes will affect a large number of businesses, so keeping up to date is essential.”
The new rates have been calculated by the Revenue on data provided by the motor industry on fuel consumption in relation to fuel prices.