Budget 2021 – Motoring costs

Fuel prices

Fuel duty was frozen again.

Vehicle Excise Duty (VED)

VED (Road Tax) for cars, vans, motorcycles and HGVs will increase in line with the Retail Price Index from 1 April 2021.

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.

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

Car benefits are based on a percentage of the list price of the car.  The percentage depends on the CO2 emissions of the vehicle.
The rates for 2021-22 to 2024-25 can be found here (there is no direct bookmark, so you have to scroll down – sorry!!).
Note that there was a 0% benefit rate for zero emission cars for 2020-21, increasing to 1% in 2021-22 and 2% in 2022-23.  The Budget documents confirm that the rate will remain at 2% for 2023-24 and 2024-25.
Van benefit
The van benefit in kind charge will increased from £3,430 to £3,490 for 2020-21.
The benefit for zero emission vans will be reduced to zero from 6 April 2021.

Fuel benefit

The base figure for calculating the benefit where private fuel is provided alongside a company car will increase with CPI to £24,600 (from £24,500) with effect from 6 April 2021.

The van fuel benefit charge will be £669 (increased from £666) for 2021-22.

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