HMRC have announced new rates for journeys on or after 1 February 2007.

As the announcement was made towards the end of January HMRC have advised that where employers have practical difficulties implementing the new lower rates they can continue to use the older higher rates for a further month, up until 28 February 2007.  This means that they won’t have to take account of the income tax, NIC and VAT implications of paying allowances at the higher rate. This delay is intended to allow time for drivers and employers to adjust to the new rate.

The rates apply to the reimbursement of business fuel to company car drivers but may also impact on the amount of VAT that can be reclaimed on employee car mileage.  Please do get in touch if you need any help in implementing the new rates.

Internet Link: HMRC Advisory fuel rates