Business mileage rates latest
Posted: 12th September 2011
HMRC have updated the current car fuel rates – the amounts which can be used to reimburse employees for fuel or for business use of their cars. The only change is with regard to vehicles powered by LPG.
- VAT may be recovered by the business on payments made to employees based on the fuel (only ) element of the payment. You must retain receipts for fuel sufficient to justify the VAT recovery.
- Employees who use their own cars for business purposes should be insured for that use. Use of a higher reimbursement rate may be used if justifiable, but unless the guideline rates are used, this is likely to cause problems on your next PAYE inspection.
- Where a greater sum is paid, a benefit in kind may arise and if this is intended, you should take professional tax advice.
- All mileage claims must be justifiable. Retention of a business mileage log, which is contemporaneously updated, is recommended.