The Pre Budget Report reduced VAT but reintroduced fuel duty – a 2p per litre rise.

I think we’ve understood this government long enough to know that what’s given is also taken back. And then some more.

So the reintroduction of the fuel duty rise will mean fuel costs more. While you might want to debate about the fairness of it all, the one issue that hasn’t really gone away is the cost of fuel. It’s just going up, despite the recent respite in fuel prices.

It means that small businesses must think about the business cars they run; the sort of mileage they are likely to cover; and the fuel economy and CO2 emissions of their business cars.

This doesn’t necessarily mean a diesel car is the correct option.

Diesel cars cost more; and diesel fuel costs more. Depending on your mileage you could be better off by going for a petrol business car. You just have to do the sums. But that is important. Don’t default to diesel just because everyone else around you is.

Still the Pre Budget Report has made personal contract hire cheaper. By 2.5%. So if you’re thinking of a new car, this might be timely to choose PCH – see our story Personal contract hire is Pre Budget Report winner.

And now there has been no change in the business mileage rates – these have remained static at 40p per mile for the first 10,000 miles – it does mean that you need to keep an eye on the car’s CO2 emissions. The lower the CO2; the better the fuel economy; the more advantageous business mileage rates become. Especially as the government is letting their value erode.

So choose your next business car with care. And don’t be left out of pocket by the rises in fuel prices.
Despite fuel cost rises, AMAPs stay at 40p per mile