New two-tier mileage rates for electric vehicles
The amount that employers can reimburse staff for business travel in company cars changes from 1 September 2025. What are the new rates, and why is this update different to previous ones?
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Accounting for VAT if there is no cash payment
Your business has submitted repayment returns for the last two quarters and you are concerned that you might have underpaid output tax on some supplies where no money has changed hands. Are your concerns justified?
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Treatment of distributions under review
The government has launched a consultation on modernising the tax treatment of distributions and repayments of capital by companies. The proposals could affect the distinction between dividends taxed as income and capital payments subject to CGT. What changes are being considered?
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Tax relief on equipment you haven’t paid for (yet)
The timing of tax relief for purchases of equipment isn’t straightforward when payments are delayed or goods are purchased through hire purchase (HP) agreements. How can you use these rules to your advantage and get tax relief before you’ve paid the final invoice?
Advisory fuel rates for company cars are updated by HMRC on a quarterly basis due to fluctuations in fuel prices. The rates determine the amount that can be paid to an employee using a company car for business mileage, or where an employee has to reimburse their employer for private journeys. Where HMRC’s rates are used, there are no income tax consequences for the employee. HMRC has now published the advisory rates applicable from 1 September 2025. The rate per mile will be:
| Engine size | Petrol | LPG |
|---|---|---|
| 1,400cc or less | 12p | 11p |
| 1,401cc to 2,000cc | 14p | 13p |
| Over 2,000cc | 22p | 21p |
| Engine size | Diesel |
|---|---|
| 1,600cc or less | 12p |
| 1,601cc to 2,000cc | 13p |
| Over 2,000cc | 18p |
The big difference this time is the introduction of a second electricity rate for fully electric cars. For 1 September, the two rates will be:
- 8 pence per mile for home charging
- 12 pence per mile for public charging
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