Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Business

HMRC urged to increase car mileage allowances

by September 30, 2022
September 30, 2022
HMRC urged to increase car mileage allowances

A leading UK tax expert has urged HMRC to increase its car mileage rates.

Under the current scheme, employees travelling on business using their own vehicle can be reimbursed 45p per mile on the first 10,000 miles and 25p per mile for the remaining miles in a tax year.

The mileage allowance is designed to not only reimburse employees the fuel for using their own cars, but also considers other factors including road tax, repairs, and servicing/MOTs.

With the substantial increase in fuel prices over the past year, Dave Hedges, Tax Partner at Azets, says increasing the allowance will relieve some financial burden amid rising energy bills, inflation, and interest rates.

Dave Hedges said: “The energy price cap has risen and a reduction in oil prices has yet to be fully felt at the pumps. This, as well as a rise in almost every other bill, has led to millions of households struggling to cope.

“World events beyond our control have exasperated the situation and impacted supply chains, which has subsequently resulted in higher prices. We have seen a slight reduction in prices in recent weeks – but still only marginally down from historic highs.

“This could take years to stabilise – and an updated mileage rate model is required to ensure that it accurately reflects the dynamic market.”

The current 45p per mile rate was introduced in 2011 when petrol was an average of 133.65p per litre and diesel was 138.94p. In 2022, with motorists facing an average of 173.46p per litre for petrol (30% increase) and 184.21p per litre for diesel (33% increase), the tax free 45p per mile has remained static.

This is coupled with car list price inflation – for example, a new Vauxhall Corsa has increased in price from c£10k to c£16k.

Dave Hedges says a fairer system would be for the mileage allowance to increase in line with inflation, with the Government ban on new petrol and diesel cars not due until 2030.

He also warned businesses going above and beyond the HMRC approved mileage allowance rates to help cover the higher cost of fuel could be negatively impacting employees in the form of more tax.

Dave Hedges said: “With the cost of living still increasing rapidly, the Government must amend the mileage allowance so that much of the UK workforce is not out of pocket.

“There are nearly half a million electric cars in the UK, and higher fuel prices have prompted more people to consider making the switch. However, the increased fuel prices have created a current problem that requires an immediate solution now for those employees who either do not wish to or are unable to move away from the internal combustion engine.

“Employers could look to provide their employees with company cars or increase the travel reimbursement per mile to the employee. However, if an employer reimburses an employee more than the mileage allowance, the extra amount counts as earnings and is taxed accordingly.”

Read more:
HMRC urged to increase car mileage allowances

0
FacebookTwitterGoogle +Pinterest
previous post
Post-lockdown jobs boom ‘is over’ as employers worry about energy costs and recession fears
next post
Swiss court orders Lidl chocolate bunnies to be melted as premium sweet brand Lindt win case that they were too similar to their own products

You may also like

UK job vacancies fall at fastest pace since...

December 9, 2024

Why Is Generative AI No Longer a Luxury...

October 11, 2024

Thousands of UK Boeing jobs at risk as...

October 13, 2024

HSBC sets aside $876m for bad loans amid...

April 29, 2025

How to network effectively from a remote setting?

July 3, 2024

Spacegoods Raises £2.5M to Become Europe’s Leading Functional...

February 14, 2024

Inheritance Tax Conflicts with Conservative Values, Says Hunt

May 25, 2024

Fashion For Thought: Nailing Your Clothing Brands Identity

January 18, 2024

Sunniest April on record lifts UK retail sales...

May 13, 2025

Sterling plunges to lowest level against the US...

September 8, 2022

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Trump warns of ‘serious consequences’ if Elon Musk funds Democrats

      June 7, 2025
    • Musk jokes about reconsidering stance on Big Beautiful Bill after Schiff’s praise

      June 7, 2025
    • Musk deletes explosive posts about Trump and Epstein files

      June 7, 2025
    • House witness flips script on Dem who ambushed him during hearing with unearthed tweet: ‘Iceberg is ahead’

      June 7, 2025
    • Call with China’s Xi, and Trump-Musk exchange fueled barbs during 20th week in office

      June 7, 2025
    • Trump’s conservative allies warn Congress faces critical ‘test’ with $9.4B spending cut proposal

      June 7, 2025

    Categories

    • Business (8,152)
    • Investing (2,019)
    • Politics (15,568)
    • Stocks (3,136)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved