FUEL prices have eased down since the last review of business mileage rates applied since the beginning of March, helped by competition between the supermarkets.
So the latest update for company car drivers from the taxman effective 01 June will not be too painful.
The one change is for petrol cars over 2 litres, down from 22p to 21p per mile, which is where it was for the first quarter before HMRC’s puzzling last quarter initial drop from 21p to 20p that was subsequently not only reversed but increased to 22p.
The new company car business mileage rates, known as the HMRC advisory fuel rates (AFRs), kick in from June 1 2017.
So who are the losers?
- Petrol cars with engines over 2000cc get 1p per mile less
If you drive a hybrid company car, then the business mileage rates reflect the appropriate petrol or diesel AFRs; again the new rates are effective from June 1, 2017.
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 May from the Department of Energy and Climate Change and LPG average price quoted on the AA website.
The updated company car business mileage rates are listed below
Petrol: Company car mileage rates from 01 June 2017
- Engine size 1400cc or less: 11p – unchanged
- 1401cc to 2000cc: 14p – unchanged
- Over 2000cc: 21p – 1p decrease
Diesel: Company car mileage rates from 01 June 2017
- Engine size 1600cc or less: 9p – unchanged
- 1601cc to 2000cc: 11p – unchanged
- Over 2000cc: 13p – unchanged
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 from 01 June 2017
- Engine size 1400cc or less: 7p – unchanged;
- 1401cc to 2000cc: 9p – unchanged;
- Over 2000cc: 14p – 1p unchanged
What about business mileage rates for private cars on business?
The Advisory Fuel Rate company car business mileage rates are to be used by company car drivers and should not be confused with Approved Mileage Allowance Payments, known as AMAPs.
These AMAP payments are the tax-free pence-per-mile rates applicable only when drivers use their private cars for business purposes.