HMRC has announced the new rates for the reimbursement of employees for business travel in their company cars, or when employees are required to repay the cost of fuel used for private travel.
If the rate paid per mile of business travel is no higher than the advisory rate for the particular engine size and fuel type of the car,there is no income tax or Class 1 NICs liability for the employee.
If a lower rate is reimbursed, only the lower rate may be used to calculate an income tax deduction.
The new rates apply from 1 January 2009.
