HMRC fuel rates

From 1 July 2008 the Revenue have published new mileage rates that company car users can use to calculate the fuel cost of running their vehicles for private purposes. The new rates may be used from 1 June 2008. If this private element is repaid to employers the employees will avoid the penal car fuel benefit charge. The new rates are:

Engine size:

* 1400cc or less:           petrol 12p, diesel 13p, LPG 7p.
* 1401cc to 2000cc:      petrol 15p, diesel 13p, LPG 9p.
* Over 2000cc:               petrol 21p, diesel 17p, LPG 13p.

Employers can also use these rates to calculate the VAT input tax on fuel included in staff mileage claims – employers will need to retain fuel receipts from staff to prove the fuel was purchased. It is unlikely that staff will have receipts that exactly match the fuel element on their claim forms. Receipts should cover the same time period and be sufficient to cover the VAT claimed.

The rates for use of the employees vehicle for business mileage remain unchanged at

First 10,000 miles      40p per mile

thereafter                    25p per mile

These rates have remained unchanged for many years despite the dramatic fuel price rises, an increase is long overdue!

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