24th January 2026 – Hillmans Weekly Update

Welcome to our latest round-up of the latest business and tax news for our clients. Please contact us if you want to talk about how these updates affect you. We are here to support you!

Have a great weekend.

Kind regards,
 
Steve
 
Steven Hillman BSc (Hons) FCA
Chartered Accountant
Tel: 01934 444100
https://www.hillmans.co.uk

Why Management Skills Matter More Than Ever for Business Owners
Many people start a business because they are good at what they do. A great designer sets up on their own. A skilled electrician goes self-employed. A consultant turns expertise into income. What often comes later is realising that running a business and doing the work are two very different jobs.

As a business grows, management skills become just as important as technical ability for the success of the business.

What management really means in a small business
In a smaller business, management is not about hierarchy or job titles. It is about how work gets organised and how people, including you, are supported.
Good management often shows up in quite simple, everyday ways. For instance:

• Setting clear expectations with staff, contractors or clients.
• Deciding between what needs to be done now and what can wait.
• Spotting problems early, before they become expensive.
• Having time to step back and think.

Firefighting, missed deadlines, confused roles, work being redone, or feeling constantly stretched can all be signs of a need to improve how the business is being managed. These kinds of issues do not usually come from a lack of effort; they come from a lack of structure.

Why management skills often get overlooked
Management skills often fall down the priority list because time is tight and client or customer work comes first. Or it may be that managing people feels uncomfortable or unfamiliar.

However, not addressing how the business is managed means you can end up stuck in the day-to-day, with little capacity to focus on growing the business or carrying out long-term planning. 
 
How improving management skills helps your business
Businesses with clearer management tend to:

• Run more predictably, with fewer surprises.
• Retain staff for longer and reduce recruitment costs.
• Have happier customers because they deliver a more consistent service.
• Free up time for the business owner to be able to focus on strategy.

Even small changes, such as regularly checking in with staff or having clearer task planning, can have a noticeable impact.

Practical ways to build management skills
Improving management does not require formal qualifications or years of experience. For many business owners, they make progress by:

• Talking with other business owners about what works.
• Finding a mentor who can challenge their thinking and share experience.
• Undertaking some short, practical training.
• Thinking about what’s not working and making one change at a time to gradually improve it.

Just like with any other part of the business, management can be learned and improved over time.

A final thought
Good management and proper controls are vital for business success. Having the best idea in the world is only half the story. It is management skills that will make the idea work and keep you and your staff happy along the way.

Why not talk to us about one of our management improvement days? We can help you to identify your key systems and standardise how the business operates, so your efforts can be focused on where they add most value.
 
Nearly 500 employers fined over National Minimum Wage breaches
Almost 500 UK employers have been fined a total of £10.2 million for failing to pay the National Minimum Wage (NMW), with £6 million returned to 42,000 workers.

The list of named employers includes well-known high-street brands, indicating that businesses of all sizes can have difficulties in applying the minimum wage rules correctly. 
 
Implications for employers
For businesses, this latest naming round highlights the ongoing scrutiny there is on minimum wage compliance.
The NMW and National Living Wage rates increased earlier this year, with a further rise planned from April 2026. As a reminder, the rates are:

2025 rate / 2026 rate

• National Living Wage (21+): £12.21 → £12.71

• 18–20: £10.00 → £10.85

• Under 18: £7.55 → £8.00

• Apprentice: £7.55 → £8.00

Failing to pay workers correctly can lead not only to fines but also risks harm to the business’s reputation.

With employees being encouraged to obtain advice from Acas or complain to HM Revenue & Customs (HMRC), it is an important area to get right.

Strengthening enforcement
The government plans to expand oversight of labour standards in 2026 with the creation of a Fair Work Agency as part of the new Employment Rights Bill.

The agency will have powers to address employers who underpay workers and fail to pay holiday and sick pay.

If you need help with your payroll and ensuring that your staff are paid correctly, please get in touch. We would be happy to help you!

See: https://www.gov.uk/government/news/expansion-of-support-scheme-to-help-thousands-of-people-back-into-work
 
Private sector pay growth slows to five-year low
UK wage growth eased to 4.5% between September and November 2025, according to the Office for National Statistics, reflecting a notable slowdown in private sector pay.

Pay in private businesses rose just 3.6%, the lowest rate in five years. Public sector wages increased 7.9%, however, the ONS has said that this was likely due to pay awards being brought forward when compared with the previous year.

The labour market showed further signs of cooling. The number of people on company payrolls fell by 135,000, with the decline concentrated in retail and hospitality.

Youth unemployment for 16-24-year-olds remained elevated at 15.9%, while overall unemployment held at 5.1%, the highest since early 2021.
 
Are there any takeaways for businesses?
Economists have interpreted slower private sector pay growth as something that will ease inflationary pressures, which may help in further cuts to interest rates.

Slower private sector pay growth suggests that there could be some relief to wage pressures over the next few months, although with an increase to national minimum wage rates coming in April, hiring is unlikely to get cheaper.

The weaker hiring activity by retail and hospitality businesses suggests that consumers are feeling the pinch, which could have implications for sales income for many businesses.

See: https://www.bbc.co.uk/news/articles/cddgrg87ly5o
 
Self-employed workers able to apply for enhanced DBS checks
From 21 January 2026, new legislation allows self-employed individuals and personal employees to apply for Enhanced and Enhanced with Barred List(s) DBS checks in their own right for the first time.

Until now, self-employed people could only obtain a Basic DBS check. Where an Enhanced check was needed, an employing organisation had to apply on their behalf, which was not always possible when someone was working directly for individuals.

What’s changing
Under the new rules, self-employed workers and personal employees who are paid for their role will be able to apply for Enhanced DBS checks themselves, provided their role is eligible.

Applications must be made through a DBS umbrella body, rather than directly to DBS.

This change is expected to be particularly relevant for:

• Private tutors providing lessons directly to children.
• Carers or support workers hired directly by individuals.

What isn’t changing
The eligibility criteria for DBS checks remain the same. Only roles that already qualify under existing DBS legislation will be eligible.
Where someone works for, or is contracted by, an organisation, the existing process still applies. Employers can continue to apply for DBS checks on behalf of their staff in the usual way. 
 
How applications will work
Self-employed individuals and personal employees will need to apply through a registered DBS umbrella body. These organisations are authorised to process DBS checks and submit applications to DBS.

The existing DBS fees still apply, and umbrella bodies may charge an additional administration fee. A list of suitable umbrella bodies can be found using the find an Umbrella Body tool on GOV.UK.

If you’re hiring someone directly
If you are hiring a self-employed worker or a personal employee, you cannot apply for a DBS check on their behalf. Instead, the individual being hired must make their own application through an umbrella body.

When recruiting, you can ask to see the applicant’s original DBS certificate and use the free DBS Update Service to check whether it is still current.

If you are working independently in roles involving children or vulnerable adults, this change should make it easier to obtain the appropriate level of DBS check without relying on an organisation to apply on your behalf.

See: https://www.gov.uk/government/news/self-employed-workers-and-personal-employees-can-now-apply-for-enhanced-dbs-checks
 
Small Business Britain Launches ‘Small and Mighty Enterprise Programme’ to Support Small Businesses
Small Business Britain is set to roll out its Small and Mighty Enterprise Programme, a six-week online course designed to help sole traders and micro businesses unlock growth opportunities.

The programme combines expert guidance, mentoring, and practical resources to equip participants with a twelve-month action plan to grow and flourish over the next year. Delivered entirely online, it offers flexible learning accessible from anywhere in the UK, making it suitable for business owners with busy schedules.

Key features of the programme include:

• Live weekly sessions recorded and available on a private Small Business Britain website available exclusively to participants.
• Weekly worksheets developed by each week’s expert trainers to reinforce key learning outcomes.
• 1-2-1 and group mentoring, providing one hour of personalised guidance across the six weeks.
• Access to an exclusive community of peers and mentors for networking, advice, and sharing experiences.
• A personalised twelve-month Action Plan to guide business growth.

The course runs from 2 February to 9 March 2026, with sessions held every Monday at 10am.

Small business owners looking to develop their skills, expand their networks, and plan for growth can find more information and register via the Small & Mighty Enterprise Programme Registration page.
 
WorkWell to roll out across England
A national expansion of WorkWell, a health-and-employment support service, is set to take place across England, following a successful pilot that helped more than 25,000 people stay in or return to work.

The programme aims to support up to 250,000 more people with health conditions, and forms part of the government’s wider efforts to tackle long-term sickness absence and economic inactivity.

For employers, the key point is that WorkWell is designed as an early intervention service - stepping in before health issues lead to prolonged absence or an employee leaving work altogether.

Long-term sickness remains a significant issue for businesses. Around 2.8 million people are currently out of work due to long-term health conditions, and fit notes are issued more than 11 million times a year.

How employees can access support
Participants in the programme can be referred through:

• Their employer.
• A GP.
• Jobcentre Plus.
• Local services.
• Self-referral.

Each participant receives personalised support from a Work and Health Coach. Services offered vary depending on location, but can include physiotherapy, mental health support, workplace adjustment advice for employers and ongoing health condition management.

Businesses may want to be aware of WorkWell as a referral option for staff struggling with health issues.

See: https://www.gov.uk/government/news/expansion-of-support-scheme-to-help-thousands-of-people-back-into-work

16th January 2026 – Hillmans Weekly Update

Welcome to our latest round-up of the latest business and tax news for our clients. Please contact us if you want to talk about how these updates affect you. We are here to support you!

Have a great weekend.

Kind regards,
 
Steve
 
Steven Hillman BSc (Hons) FCA
Chartered Accountant
Tel: 01934 444100
https://www.hillmans.co.uk

Getting Ready for Making Tax Digital
With just 10 weeks or so to go until the new tax year, many businesses are preparing for the changes that Making Tax Digital (MTD) will bring. From April, sole traders and landlords with an income of over £50,000 will need to submit quarterly updates to HMRC.

It is estimated that around 900,000 individuals will be joining in April. If you are affected, this will be a major change and the earlier you can be prepared, the better.

Using approved software
MTD requires the use of software. Whether you are already a ‘digital native’ with your bookkeeping, or have not yet made the jump, it will be vital to make sure that any accounting software you use is HM Revenue & Customs (HMRC) approved for MTD use.

Use of software for keeping your accounting records can have benefits beyond helping you to comply with MTD. For instance, software can help streamline some of your work, make it easier to forecast your cash flow, help inform you in making financial decisions and help to reduce mistakes.

That means that when you are selecting accounting software, it is worth considering some of the other advantages it could give you and your business.

Registering for MTD
Based on your tax return information, HMRC will get in touch with you to let you know that you need to get ready for Making Tax Digital.

However, HMRC will not sign you up automatically. This is something you will need to do, and it is important that you do this in time.

Are there any exemptions?
There are some automatic exemptions from MTD. For instance, if you are submitting a tax return as a trustee or as a personal representative of a taxpayer who has died, there is no need to sign up for MTD. Generally, HMRC will tell you if you are automatically exempt.

In addition to automatic exemptions, there are situations where an exemption can be applied for. So, it pays to check whether your situation might mean you can apply.
 
What if your income is less than £50,000?
MTD is being given a phased introduction. MTD will become mandatory for sole traders and landlords as follows:

• 6 April 2026 - those with income above £50,000
• 6 April 2027 - those with income above £30,000
• 6 April 2028 - those with income above £20,000

It is possible to voluntarily sign up sooner if you wish.

Does MTD apply to partnerships?
Not yet, however, HMRC have advised that business partnerships will also need to use MTD in the future. The timeline for when this will happen will be set out at a later date.

Would you like help with MTD?
Choosing software can be a bit of a minefield, so if you would like support, we can offer you a tailored recommendation and any training you need. We can also handle your registration with HMRC.

If you would like ongoing help with bookkeeping, filling in the quarterly returns, or you just want us to handle the end-of-year return, please get in touch. We would be happy to help you!
 
New to Self Assessment Tax? Here’s an Explainer
If you are new to being self-employed or being a landlord, Self Assessment can feel like one of those jobs you know you should understand better, but never quite get around to.

When do you actually pay the tax? Why does January seem to be so expensive? And what on earth is a “payment on account”?

In this article, we’ll walk you through how Self Assessment tax payments work in practice, the key dates to watch, and how to avoid nasty surprises by planning ahead.
 
Understanding Self Assessment payments
Once your tax return is completed and filed, HM Revenue & Customs (HMRC) calculate how much tax you owe on all income you have earned outside of PAYE. Unlike tax taken automatically from a salary, you are responsible for paying the tax yourself. That is why knowing the deadlines is crucial.
  
For most people, there are two main types of payments to make each year:

1. Payment on account - This is essentially a prepayment for your next year’s tax. When your tax bill for a year is over £1,000, HMRC will require you to make two equal payments on 31 January and 31 July. Think of it like a deposit on your tax bill.
   
2. Balancing payment - This is the top-up for anything left over once your tax return is finalised and submitted. It’s due by 31 January following the end of the tax year.For example, say your tax bill for 2023/24 was £3,000. You will likely have paid £1,500 on 31 January 2025 and another £1,500 on 31 July 2025 as payments on account. Then, if your tax bill for 2024/25 is £3,200, you will pay the £200 balancing payment on 31 January 2026. You will also pay a £1,600 payment on account against the next year’s tax bill on the same date, which means you would pay a total of £1,800 on 31 January 2026.

If you are new to Self Assessment, then you probably will not have made any payments on account for the first tax year that you file a tax return for. So, you will need to pay the full balance for the entire tax year on the 31 January following the tax year end.

In other words, if your tax bill for 2024/25 is £3,200, you’ll need to pay £3,200 on 31 January 2026. You’ll also pay a £1,600 payment on account against the next year’s tax bill on the same date, which means you’d pay a total of £4,800.

No wonder January can feel so expensive!

How to pay
Paying is straightforward once you know the methods.

These days most people pay online through their HMRC account by bank transfer or by debit card. You can also use the HMRC app to pay your bill through your bank’s app or by using online banking.

You just need the reference numbers to make sure the money goes to the right place.

Avoiding surprises
Late or missing payments can lead to penalties and interest charges, so planning ahead is essential. A good tip is to set up a calendar reminder so that you don’t forget to make the payment on time.

Keeping a separate pot of money for tax that you save each month can also prevent you from scrambling at the last minute.

If you need help completing your tax return or want advice on paying tax, please get in touch. We would be happy to help you!

See: https://www.gov.uk/government/news/65-rise-in-self-assessment-payments-via-the-hmrc-app
 
Choosing an MSP: What Every Business Needs to Know
Most smaller businesses use a Managed Service Provider (MSP) to provide IT and website support. If you are not an IT expert yourself, it can be challenging to know how to select an MSP and to ensure that they will deliver the services you need for your business.

With UK businesses increasingly under attack from cyber criminals and your MSP having access to your systems and data, it’s also important to know that your MSP is serious about cybersecurity.

The National Cyber Security Centre (NCSC) has published a handy guide that can help you to ask the right questions and be able to take a proactive approach with your MSP.

What’s in the guide?
The following subjects are covered in the guide:

• Choosing an appropriate MSP - The guide includes information on the certifications you should expect to see and what should be contained in a clear contract. 
• Security issues to discuss with your MSP - These include ideas for conversations to have with your MSP on patching and updates, backups, access, logs and incident response. 
• Details to check in your MSP contract - For instance, you will want to know about your Service Level Agreement (SLA) response and resolution times, and what plans you have for systems that are coming to the end of their life.

The guide concludes with an MSP due diligence checklist that could be a useful resource when discussing your IT systems and website with your current MSP or when you need to find a new one.

To review the guide, see: https://www.ncsc.gov.uk/guidance/choosing-a-managed-service-provider-msp 
 
Backtrack on Digital ID Requirements
It appears that the government has backtracked on plans to require workers to register with its new digital ID programme to prove their right to work in the UK.
While right-to-work checks will still be carried out digitally by 2029, such as by using biometric passports, registering for a digital ID will be optional.

Transport Secretary Heidi Alexander confirmed that mandatory digital right-to-work checks will be brought in to help crack down on illegal working, but that the digital ID will be one way that a worker could use to prove their eligibility to work.

The idea of compulsory digital IDs has proved unpopular with nearly three million people signing a parliamentary petition to oppose their introduction.
Details on how the digital ID will work are not yet available. Many expect it to be based on the Gov.uk One Login and the yet to be launched, Gov.uk Wallet.

In the meantime, it is already possible to use government-certified digital verification services to do passport checks on British and Irish citizens. The Home Office also provide an online service for verifying the status of non-British or Irish citizens where the individual’s immigration status is held electronically.

See: https://www.bbc.co.uk/news/articles/c3385zrrx73o
 
Fairer Prices for Farmers on Sheep Carcases
New rules came into effect last week that mandate classification and price reporting for sheep carcases in England and Scotland. This means that the sector is now brought into line with beef and pork.

The rules should mean that producers will have clearer information on how animals are assessed and priced at slaughter, and make it easier for them to analyse market demand to see what attracts premium prices.

National Sheep Association CEO Phil Stocker described the new regulations as a helpful step that will give sheep farmers more clarity and should “create better transparency and trust through the supply chain.”

Wales and Northern Ireland will be issuing equivalent measures in early 2026.

See: https://www.gov.uk/government/news/sheep-carcase-classification-rules-to-deliver-fairer-prices-for-farmers
 
Construction Firm Fined £60,000 After Worker Falls Through Unprotected Stairwell
A Northwest construction company has been fined £60,000 after an employee was seriously injured falling through an unprotected floor opening.

The incident occurred in April 2024 at a site in Cumbria when a general labourer was sweeping dust and debris on the first floor. Boards had been laid across part of an opening for a staircase, but they did not cover the full gap, and no edge protection or warning signs were in place. While working along the boards, a newly built wall collapsed, knocking him over the unprotected edge.

The employee fell from around 2.5 to 3 metres and spent a month in hospital recovering from multiple fractures and a dislocated shoulder.

An HSE investigation found that the risk had not been addressed, there was no supervision at the time, and the worker had not been given safety instructions.
The company was found guilty of breaching Regulation 6(3) of the Work at Height Regulations 2005 and was fined and ordered to pay costs and a victim surcharge.

HSE Inspector Derek McLauchlan commented: “Any work at height is potentially high-risk and requires proper planning and implementation. This incident could have been avoided had appropriate control measures and training been in place.”

This case highlights the importance of ensuring the safety of employees working at height. A guide on what employers need to do to protect their employees from falls from height is available on the HSE website.

See: https://press.hse.gov.uk/2026/01/07/construction-company-fined-60000-after-worker-falls-through-unprotected-floor-opening/

9th January 2026 – Hillmans Weekly Update

9th January 2026 – Hillmans Weekly Update

Happy New Year, and welcome to our latest round-up of the latest business and tax news for our clients. Please contact us if you want to talk about how these updates affect you. We are here to support you!

Have a great weekend.

Kind regards,
 
Steve
 
Steven Hillman BSc (Hons) FCA
Chartered Accountant
Tel: 01934 444100
https://www.hillmans.co.uk

MAKING TAX DIGITAL FOR INCOME TAX – AN UPDATE
Making Tax Digital (MTD) for income tax will be mandated for a large group of self assessment taxpayers from 6 April 2026, with even more individuals being mandated in 2027 and 2028. The following MTD for income tax measures were announced at Budget 2025:
 
Let’s start with some good news! The government has announced that late filing penalties will not be issued in respect of quarterly updates in 2026/27. This easement will not apply to the 2026/27 annual tax return, which must be filed by 31 January 2028. All quarterly updates must be submitted before the annual tax return can be filed.
 
We had previously been told that taxpayers who currently report income on the SA109 self assessment page (residence, remittance basis etc) will not need to comply with the MTD rules until April 2027. Budget 2025 included a list of even more types of taxpayer who will be deferred until April 2027:

• Recipients of trust and estates income,
• Individuals who use averaging adjustments (e.g. farmers and creative artists),
• Recipients of qualifying care income, and
• Non-UK resident foreign entertainers or sportspeople. 

Taxpayers who are under deputyship will also be exempt from MTD for income tax.
 
EMPLOYEES’ WORKING FROM HOME EXPENSES
From 6 April 2026, employees will no longer be able to claim a tax deduction from their earnings in respect of expenses incurred while working from home.  Historically, some home-working employees have claimed a flat-rate deduction of £6 per week or the actual costs of working from home, if higher.
 
The government has said that such relief will be abolished because too many people are claiming the deduction when they are not entitled to it.
 
Employers will still be able to reimburse home-working expenses to employees free of PAYE tax and national insurance contributions, but only if those expenses are wholly, exclusively and necessarily incurred as a result of their employment duties. This is a high bar to cross – it generally means that the employee’s contract requires them to work from home. Employees who choose to work from home will not qualify for tax-free reimbursement.
 
MANDATORY PAYROLLING OF BENEFITS IN KIND FROM APRIL 2027
From April 2027 it will be mandatory for employers to include most benefits in kind (BiKs) provided to employees in their payroll.
 
All BiKs will need to be payrolled except employer provided living accommodation and interest free and low interest (beneficial) loans. It will be possible to payroll these two BiKs on a voluntary basis.
 
Early preparation can ensure a smooth transition to the new system with minimal disruption, cost, and impact on employees. Employers are also reminded not to underestimate the time it will take to ensure payroll processes are robust enough to handle real time reporting of BiKs.
 
We can help you with the switch to payrolling BiKs, but it’s important that your employees are made aware of the changes to how their BiKs will be taxed from April 2027. Early communication will be key to enable them to understand how this might affect their tax codes and take-home pay.
 
 It is important that you explain that:
 

• employees who are currently paying tax in arrears on their BiKs will not be doing so from April 2027 onwards – many employees may not realise that this is how they were paying tax on their BiKs, and that they will be paying tax on their BiKs in the year that they receive them.
• they may currently have a deduction in their tax code so that they pay tax on an estimated BiK – this will no longer be the case from April 2027.
• tax on BiKs will have to be paid in real time in the year that they are received.

Where an employee is also paying tax on a BiK provided in a previous year, from April 2027 it might seem to them that they are paying tax twice on the BiK. You might need to explain that they will be paying tax in real time on the BiKs they receive for that year whilst also catching up with payment of tax for the BiKs from the previous years.
 
If the move to payrolling BiKs will affect you and your employees, please speak to us. We will be happy to help you switch to the new process.
 
WHAT IS E-INVOICING?
Over the coming years we will be hearing a lot more about e-invoicing because the government has confirmed that it will be mandated for VAT invoices from 2029.  It believes that growth, administrative benefits and increased revenue can be optimally achieved by the introduction of e-invoicing. 
 
Electronic invoicing or 'e-invoicing' is the digital exchange of invoice data between a buyer and a supplier's financial systems. An e-invoice is not just a digital photograph or an email attachment – it will require both the supplier and customer to have compatible software so that data in prescribed fields can be transmitted from one to the other.
 
At Budget 2025 the government announced that in 2029, business-to-business (B2B) and business-to-government (B2G) VAT e-invoices will be mandatory. They also confirmed that real-time reporting of e-invoices to HMRC will also be mandated in future, although this will occur after 2029.
 
The government plans to announce a detailed roadmap implementing mandatory e-invoicing for VAT at Budget 2026. 
 
WHY DID THE CHICKEN GO TO THE VAT TRIBUNAL?
In WM Morrison Supermarkets v HMRC, the first tier tribunal (FTT) found that rotisserie chickens were a supply in the course of catering and therefore subject to VAT at 20%.
 
VAT legislation zero-rates supplies of food, but supplies of catering are excluded from the zero-rating.  ‘Catering’ includes supplies of hot takeaway food but not cold. ‘Hot takeaway food’ is also defined and includes any food that is kept hot after it has been heated, be it on hot plates, under heat lamps or in packaging that retains heat. This is why it is possible to buy a VAT-free hot pie or pasty; if they are neither cooked to order nor kept warm, they can be zero-rated straight out of the oven!
 
Any takeaway food that is advertised or marketed in a way that indicates that it is supplied hot will also be subject to VAT at 20%.
 
Morrisons appealed to the FTT against VAT assessments totaling £17,034,932. They argued that their rotisserie chickens were cold takeaway food and were therefore zero-rated. HMRC argued that the chickens met several of the conditions for standard-rating.
 
The FTT found that the chickens were not advertised or marketed as hot food but they were kept in packaging that retained heat. Morrisons claimed that the plastic-lined chicken bags were merely designed to contain chicken juice, but it was found that in the packaging a tightly-wrapped chicken would cool by 47.06% after 2 hours, compared with a 62.59% temperature drop for an unwrapped chicken over the same time period.
 
The chickens were therefore hot takeaway food and a standard-rated supply of catering.
 
This case demonstrates the complexities involved in establishing the VAT rating of some supplies. If you have any questions about charging VAT on your goods or services please get in touch with us.
 
ADVISORY FUEL RATES FOR COMPANY CARS
 
The table below sets out the HMRC advisory fuel rates from 1 December 2025. These are the suggested reimbursement rates for employees' private mileage using their company car.
 
Where the employer does not pay for any fuel for the company car, these are the amounts that can be reimbursed in respect of business journeys without the amount being taxable on the employee.
 
 Engines up to 1400cc
    •    Petrol: 12p (previously 12p)
    •    Diesel: 12p (previously 12p)
    •    LPG: 11p (previously 11p)

Engines over 1400cc and up to 1600cc
    •    Petrol: 14p (previously 14p)
    •    Diesel: 13p (previously 13p)
    •    LPG: 13p (previously 13p)

Engines over 2000cc
    •    Petrol: 22p (previously 22p)
    •    Diesel: 18p (previously 18p)
    •    LPG: 21p (previously 21p)

Previous rates are shown in brackets. 
  
You can also continue to use the previous rates for up to 1 month from the date the new rates apply.
 
Note that for hybrid cars, you must use the petrol or diesel rate.
 
For fully electric vehicles the rate is 7p (8p) per mile where the vehicle is charged at home. The rate applicable to vehicles charged using public facilities is 14p (14p) per mile.
 
Employees using their own cars
For employees using their own cars for business purposes, the Advisory Mileage Allowance Payment (AMAP) tax-free reimbursement rate continues to be 45p per mile (plus 5p per passenger) for the first 10,000 business miles, reducing to 25p per mile thereafter. Note that for NIC purposes the employer can continue to reimburse at the 45p rate as the 10,000 mile threshold does not apply.
 
Input VAT
Within the 45p/25p AMAP payments, the amounts in the above table represent the fuel element. The employer is able to reclaim 20/120 of the fuel amount as input VAT provided the claim is supported by a VAT invoice from the filling station. For a 1300cc petrol-engine car, 2 pence per mile can be reclaimed as input VAT (12p x 1/6).