Mileage rates have been cut by nearly a fifth
COMPANY car mileage rates have been slashed by up to 18% as HMRC cut the tax allowance across all six of the petrol and diesel categories in response to continuing fuel price falls.
Hardest hit by the rates, known as advisory fuel rates (AFR), are drivers of company cars with petrol engines greater than 1,401cc which have suffered a 3p cut in rates applicable from 1 March.
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Yet even petrol engines under 1,400cc will see a 2p cut, the same as all three diesel categories.
Even the more fuel efficient users of LPG see a 1p cut in both the smaller engine sizes up to 2,000cc while over that threshold rates are cut by 2p to reflect lower pump prices.
AFR is 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.
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Hi
I have just ordered a new Mitsubishi Outlander PHEV (plug-in hybrid electric vehicle) and looking to put an electric point in my house which will allow me to driver to work and return home on pure electric. So should I also be paying for petrol that I’m not using?
I’m not entirely sure what your question is, but assuming you are saying that should you be repaying your firm for the mileage used privately, then the answer is yes – electric mode or not. See also What are business mileage rates for green cars?. However, it might be worth asking your local HMRC office if you can receive a dispensation – as long as you can prove your mileage was electric. Ralph Morton, editor