HMRC announced on 29 Jan that the rates payable for car fuel (where a mileage rate is paid to company car users for business travel) was to be reduced from 1 February 2007.

 

The mileage rates are payable when an employee uses a company car for business purposes and is reimbursed only for fuel used for business purposes. Using this system provides reimbursement for the employee for business mileage and prevents an assessable benefit in kind arising for fuel benefit, which is chargeable if fuel is provided by the employer for private motoring.

 

The new rates are:

 

 

The changes are meant to take account of the recent falls in fuel prices.