Budget 2012 – Motoring Costs

Fuel prices

The Chancellor announced that the increase in fuel duty announced in the Autumn Statement 2011 of 3.03 p per litre will still take place on 1 August 2012 as planned.

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 remain at 45p for the first 10,000 miles per annum and 25p per mile for any excess.

Company Cars

Car benefit

The percentages for calculating company car benefits will increase by 1% from April 2014 for all vehicles with carbon emissions of over 75g, up to a maximum of 35%.

In addition in both 2015/16 and 2016/17 the percentages will be increased by two percentage points and the maximum percentage of the list price subject to tax will increase to 37%.

From April 2016, the three percentage point diesel supplement will be removed so that diesel cars will be subject to the same level of tax as petrol cars.

Fuel benefit

The base figure for calculating the benefit where private fuel is provided alongside a company car will increase to £20,200 (from £18,800) with effect from 6 April 2012.  The multiplier will increase by two per cent above the rate of inflation (based on RPI) in 2013/14.

The van fuel benefit charge multiplier will be frozen at £550, and will increase by inflation in 2013/14.




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