The Budget 2011 Motoring costs

Fuel prices

The Chancellor made a surprise announcement that fuel duty would be cut by 1p with effect from 6pm on Budget day.

In addition, the increase of 3.06p per litre due to take place in April will be delayed until 1 January 2012 and the 2012/13 increase will happen on 1 August 2012.

He also announced a fair fuel stabiliser to amend the tax paid by UK Continental Shelf oil companies according to the barrel price of oil.

Business mileage payments

HMRC sets an approved mileage allowance payment (AMAP) rate. This is the rate at which employers may reimburse business mileage tax free.

Businesses with a turnover of less than the VAT registration threshold (£73,000 from April 2011) can also choose to claim a tax deduction for their vehicle costs at the AMAP rate, rather than recording all vehicle expenditure and claiming the actual costs.

The AMAP rate will increase from 40p to 45p for the first 10,000 miles per annum from 6 April 2011. The rate for mileage over 10,000 will remain at 25p.

Comment: The AMAP (Approved Mileage Allowance Payment) rate was set at 40p and 25p in 2002, when fuel prices in the spring (according to the AA) were 76p per litre. It is therefore disappointing to see an increase of only 5p per mile in the higher rate, and no increase at all in the lower rate.

Company Cars

The base figure for calculating the benefit where private fuel is provided alongside a company car will increase to £18,800 (from £18,000) with effect from 6 April 2011.

The percentages for calculating company car benefits will increase by 1% from April 2013 for all vehicles with carbon emissions between 95g and 220g.

 

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s

%d bloggers like this: