Author: RALPH MORTON
Oh dear, if you run a diesel company car – and let’s face it, the majority of company car drivers do – then the mileage rates you can claim for business have gone down in two out of the three engine size bandings.
From the beginning of June, for every business mile in your diesel company car you can claim 12p per mile for under 1600cc – that’s down 1p per mile; 15p per mile 1601-2000cc (no change); and 18p per mile for over 2000cc (down 1p per mile).
It’s hardly the news hard-pressed business car drivers wanted – but fuel prices have dropped away in the latest AA Fuel Price report for May.
Diesel company car rates are heading downwards – tables on next page
The AA said that the price per litre of unleaded had dropped by 4.1ppl (138.4ppl average) while diesel prices had lowered by 3.6ppl to 144.3ppl, increasing the price differential between petrol and diesel to virtually 6p per litre.
The new business mileage rates for company cars – known as the Advisory Fuel Rates – can be used from 01 June. The Advisory Fuel Rates change every three months in order to take account of fluctuations in the price of fuel.
The business mileage Advisory Fuel Rates can be used to claim business mileage in a company car without incurring an income tax benefit charge, or if your company pays all your fuel, to repay the private element of your mileage – again to avoid free fuel tax. The AFR rates are on the next page.
If you drive a petrol hybrid company car, then use the petrol figures.
Advisory Fuel Rates from 01 June 2012 for petrol and LPG cars
- Engine size 1400cc or less: 15p (petrol); 11p (LPG)
- 1401cc to 2000cc: 18p (petrol); 13p (LPG)
- Over 2000cc: 26p (petrol); 19p (LPG)
Advisory Fuel Rates from 01 June 2012 for diesel cars
- Engine size 1600cc or less: 12p
- 1601cc to 2000cc: 15p
- Over 2000cc: 18p
These advisory fuel rates replace the company car tax allowance for business mileage rates that were available for use from the beginning of March 2012.
Want to know the previous Advisory Fuel Rates?
Then read this – Tax: Company car business mileage rates.
Drive your own car private car on business?
The you need to read this Tax: Mileage rates for using a private car or van on business
