March 2018 Fuel Rates

HMRC have announced new fuel rates, which will apply for all journeys from 1st March 2018, until further notice. For the one month of March, either the old rates or the new rates can be applied to business journeys. Hybrid cars are treated as either petrol or diesel for this purpose. These amounts can also be used for VAT purposes but employers will need to keep receipts.

The rates are :

Petrol     :     1,400cc or less 11p ; 1,401cc to 2,000cc 14p ; over 2,000cc 22p.

Diesel    :      1,600cc or less  9p ; 1,601cc to 2,000cc 11p ; over 2,000cc 13p.

LPG       :      1,400cc or less  7p ;  1,401cc to 2,000cc  8p ; over 2,000cc 13p 

 

Salary Sacrifice and Cars

Company car salary sacrifice arrangements have changed from 5th April 2017, if the car has CO2 emissions of 76g/km or more.

If a salary sacrifice arrangement on such a car began, or changed, after 5th April 2017, then PAYE and NI must be deducted on the greater of the car benefit in kind, or the salary given up in exchange.

HMRC have recently confirmed that the amount of salary sacrificed to be used for the comparison is the figure for the car only. So, you must ignore any part of the salary sacrifice which relates to other costs such as fuel, maintenance, and other attributable services.

When structuring a salary sacrifice on a car, you should ensure that the documentation separately identifies the constituent amounts for the car and the other costs.