CHEAPER fuel prices at the pumps provide the excuse for lower allowances as HMRC cuts business mileage rates by at least 1p for both petrol and diesel categories of company cars, as well as mid-range LPG. That averages a 10% drop, with some greater proportions.
Fuel prices 31 Jan 2016Fuel prices January 31
In the latest quarterly review diesels – which remained unchanged in December amid the emissions review after taking the hit in the September – pay the penalty for the big drop of around 5p/litre at supermarkets to join petrol at under £1 per litre in late January.
As a consequence all petrol and diesel bands, and appropriate hybrid rates, drop 1p in company car business mileage rates, known as advisory fuel rates (AFR) review, with the exception of rates for diesels over 2 litres dropping 2p to 11p for the new rates effective from March 1, 2016.
Company car business mileage rates are used to claim back business mileage in company cars or to repay private mileage if fuel is provided by the company so to avoid car fuel benefit tax.
HMRC reviews the company car business mileage rates every quarter, basing its calculation this time on average fuel prices on one day in February from the Department of Energy and Climate Change and LPG average price quoted on the AA website.
The new company car business mileage rates are listed below
Petrol: Company car mileage rates from 01 March 2016
Engine size 1400cc or less: 10p – 1p decrease
1401cc to 2000cc: 12p – 1p decrease
Over 2000cc: 19p – 1p decrease
Diesel: Company car mileage rates from 01 March 2016
Engine size 1600cc or less: 8p – 1p decrease
1601cc to 2000cc: 10p – 1p decrease
Over 2000cc: 11p – 2p decrease
Hybrid fuelled company car mileage rates
Drivers of petrol/electric hybrid company cars should use the petrol rates.
Drivers of diesel/electric hybrid cars should use the diesel rates.
LPG fuelled company car mileage rates:
Engine size 1400cc or less: 7p – unchanged;
1401cc to 2000cc: 8p – 1p decrease (LPG);
Over 2000cc: 13p – unchanged (LPG)
The Advisory Fuel Rate company car business mileage rates are to be used by company car drivers and should should not be confused with Approved Mileage Allowance Payments, known as AMAPs, because these are the tax-free pence-per-mile rates applicable only when drivers use their private cars for business purposes.
Source: businesscarmanager.co.uk
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