These are used by employers to calculate:
- the amount to claim back from employees when the employer has met the costs of private mileage, or
- the amount to reimburse employees for business mileage when they have met their fuel costs directly.
If employers reimburse business mileage according to HMRC's prescribed rates (being a guide for average fuel consumption) then these are not treated as earnings for tax and National Insurance (NI). For one month from the date of change, i.e. the month of March, HMRC has confirmed that employers can use either the old or new rates.
Journeys on or after 1 June 2011
Journeys on or after 1 March 2011
Journeys made from 1 December 2010 to 28 February 2011
Further guidance can be found on HMRC's website at: http://www.hmrc.gov.uk/cars/advisory_fuel_current.htm
For further information, please get in touch with your usual Mazars contact or:
Jon Claypole - Partner