The cost of living increases, and in particular the high profile fuel cost increases, are creating pressure upon the Treasury and HMRC to revisit their fuel mileage allowances, which have remained unchanged for many years.
Employers may reimburse more than the permitted rates of 45/25ppm (or allow claims at higher rates) but the excess is liable to tax. It is seen as another erosion of employee car driver’s net income during what is an increasingly difficult time.
The mileage allowance is supposed to cover the costs of fuel, maintenance of the vehicle, insuring and taxing it, as well as depreciation. Fuel is just one element which is spiralling. The other costs continue to rise too.
Martin Tomes is HSKSG’s Director of Tax. He specialises in assisting and advising individuals and their businesses in all areas of taxation with an emphasis on tax planning, mitigation and compliance and also heads up the firm’s specialist property sector group.</font size>