Thursday, 31 December 2009

New tax-free fuel rates for company cars

HMRC have announced the new fuel rates payable to employees without generating a taxable benefit, applicable to employees when they pay for fuel in company cars out of personal funds. It makes sad reading as these compensatory rates are totally insufficient, meaning the employee pays tax on reimbursements of costs when paid back at higher rates. These rates took effect from 1 December 2009.

The rates are as follows:

Engine sizePetrolDieselLPG
1400cc or less11p11p7p
1401cc to 2000cc14p11p8p
Over 2000cc20p14p12p

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