Advisory Tax Free Fuel Rates from 1 March 2016

COMPANY OWNED VEHICLES

HM Revenue and Customs have announced revised tax free advisory fuel rates from 1 March, 2016 which may be paid for business journeys in a car owned by the business. Rates for the previous quarter are shown in brackets.

Engine size Petrol Diesel LPG
1,400 cc or less 10p (11p) 7p (7p)
1,600 cc or less 8p (9p)
1,401 cc to 2,000 cc 12p (13p) 8p (9p)
1,601 cc to 2,000 cc 10p (11p)
Over 2,000 cc 19p (20p) 11p (13p) 13p (13p)

These rates may be used in the following circumstances:-

  1. Where employers reimburse for business travel in company cars.
  2. Where employers provide fuel for company cars but employees are required to reimburse the cost of fuel for private use.

INPUT VAT CLAIMS ON MILEAGE PAID FOR COMPANY CARS OR EMPLOYEE OWNED VEHICLES

HM Revenue & Customs will accept the above figures for claiming input VAT on fuel for company cars, provided a VAT receipt is available to cover the cost of the fuel. They will also accept use of the above rates by the employer when calculating input VAT on the fuel element for employees using their own vehicles and claiming mileage under the tax free approved mileage rates for business travel of 45p for the first 10,000 miles and 25p thereafter.

If you have any queries regarding the above or require any further information please  contact us.