Paul Phillis & Co Limited

Chartered Accountants

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11a Corelli Street

Newport NP19 7AR

01633 267372


March  2013

Do you provide an employee with a company vehicle and if so does he/she pay for all fuel and then you reimburse the cost of any business mileage carried out in the vehicle?

If you do then the amount that you can pay your employee, to avoid a benefit in kind charge, is indicated in the table below.

Do you provide an employee with a company vehicle that may be used for private purposes and pay for all fuel for the vehicle but require the employee to reimburse you for the cost of fuel used for private mileage i.e. you do not provide fuel for private mileage?

If you do, then the amount that the employee is required to repay to the business for private mileage has increased as indicated by the table below.

Do you pay any employee for business mileage incurred while driving a privately owned vehicle?

If you do, then you may reclaim input VAT on the fuel element as indicated in the table below. For example the approved mileage rate, for business mileage in a private vehicle, is 45p per mile for the first 10,000 miles. This amount is designed to cover all motor running costs including insurance, tax, repairs and fuel. HM Revenue & Customs will accept the figures below as the fuel element of any mileage claim.

Who is effected?

“Advisory fuel rates”

HMRC have made some minor changes to its advisory fuel rates (AFR’s).

Worked example

1,000 miles travelled in a 1598cc diesel car

Fuel claim = 1000 x 0.13 £130.00

Input VAT at 20% =£21.67

As always, we are happy to help advise on these changes or explain them and relevant planning opportunities in further detail. If you are an existing client please speak to your regular contact.

If you are not a client and would like to arrange a free, non-obligation consultation on this or any other matter you feel that we may assist you on please call us on 01633 290745 or complete our contact form to arrange a visit.  To receive these newsletters direct to your inbox, please sign-up to our mailing list.


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