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.

Points to note:
Car Dashboard
  1. 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.
  2. 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.
  3. Where a greater sum is paid, a benefit in kind may arise and if this is intended, you should take professional tax advice.
  4. All mileage claims must be justifiable. Retention of a business mileage log, which is contemporaneously updated, is recommended.