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Tax Tip

HM Revenue & Customs advisory mileage rates

Fuel-Only Mileage Rates (Where Only Fuel Is Provided By The Employer)

HM Revenue & Customs advisory mileage rates for employee private mileage reimbursement or employer reimbursement of business mileage are:

From 1 June 2008 - Baseline fuel mileage rates
(Engine Capcacity: Petrol, Diesel, Gas)

Up to 1400cc:  12p, 13p, 7p
1401 - 2000cc : 15p, 13p, 9p
Over 2000cc: 21p, 17p, 13p

HM Revenue & Customs have announced that rates will now be reviewed biannually and generally any changes will take effect on 1 January and 1 July. This area of our site will be updated around the beginning of June and December about one month before any change takes effect.

For Employees Using Their Own Transport

The approved maximum tax and national insurance free mileage allowances for employees using their own transport for business are as follows:

(Flat Rate: First 10,000 Miles ,Miles over 10,000)
Car or van: 40p, 25p
Motorcycle: 24p, 24p
Bicycle: 20p, 20p

Income Tax and NICs are due when allowances exceed these rates. Employees can claim tax relief on any shortfall.

Rates of up to 5p per mile, per passenger, are also tax and NIC free when paid for the carriage of fellow employees in a car or van on the same business trip.

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