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Topical Tips
100
July
2007 |
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In
Topical Tips 94 and
Topical Tips 84 we
advised on the updated rates available for employees to claim on business
mileage when they pay for all the fuel on a company car.
With effect from 1 August 2007, H M Revenue &
Customs (HMRC) has increased the rates – making this the second time in a
row they have been changed after only six months! This will reverse some of the
reductions that were introduced in February, although overall the rates remain
less generous than they were last August. The revised rates are shown below
(with old rates in brackets): |
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After HMRC suddenly announced the February 2007
change on 1 February itself, an agreement was made that subsequently one
month’s notice of any further alterations would be given. As a result the
announcement for this August was made on 27 June – meaning there are a few
weeks to prepare for it this time! However, unlike the previous change, there
will be no grace period and the new rates must be applied immediately from 1
August. |
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Due to concerns over the effect of the continual
changes to mileage rates, HMRC has once again confirmed that future reviews to
the rates will only occur in the event of a variation in fuel prices of greater
than 10%. |
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- If you
have a specific vehicle that substantially differs from the above, then it is
possible to ask your local PAYE office for their agreement to using a different
rate for that vehicle.
- You must
keep detailed records of amounts claimed (date, mileage, engine size, rates
used, reason for the journey) to satisfy any HMRC visit.
- This
treatment is extended to employers with dispensations for fuel rates that are
linked to the advisory fuel rates. Where a dispensation is in place this will
need to be reviewed/adjusted.
Consult your Barnes Roffe contact partner for guidance in this
important area |
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