HM Revenue and Customs has published new advisory business mileage fuel rates for company vehicles to reflect a 5% fall in petrol prices since the rates were last reviewed in July 2008.
The new values are operational from 1 January 2009 for tax, national insurance contribution(NIC) and VAT purposes and offer a ‘safe haven’ rate for employers, at which HMRC accepts no profit is being made by employees receiving a mileage allowance for business fuel use when driving company cars.
The advisory rates apply to fuel allowance where employers either charge their employees for private use of fuel in their company cars or pay a mileage allowance for business fuel use.
The rates include the Pre-Budget Report’s reduction in VAT and the increase in fuel duty but are otherwise based on the cost of fuel as at 28 November 2008.
David Heaton, tax partner in Baker Tilly’s Employer Consulting Group, said: “Employees who have a business fuel card and reimburse employers for private use to avoid the fuel benefit charge may wish to reduce the amounts they are paying earlier than 1 January.”
The new rates (in pence per mile):
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