Is it true authorised mileage rates are changing next year?[QQ] New rules apply from 6 April 2002.
My car’s engine size is greater than two litres, will I lose out?
You will be worse off. If you travel 10,000 business miles-a-year, then this year you can claim expenses of #4,680 but next year only #4,000.
Would I be better off using a smaller-engined car?
Engine size makes no difference, but the cheaper to run the better. Those with small-engined cars up to 1.5-litres will notice a difference. If they travel up to 4,000 business miles the rate for next year is the same as this year. At 10,000 miles they are better off by #900 but after that the differential is the same.
Will I be better off driving more business miles?
Quite possibly – with the right car the new rules encourage you to drive up to 10,000 business miles and even more if it is cheap to run.
What happens if my employer pays less than these rates?
You may claim tax relief up to the rates, but if your costs are higher you cannot claim the difference. Neither will you be able to claim capital allowances or interest on loans related to car purchases.