Many employers have an arrangement with their company car drivers to obtain reimbursement of any private fuel provided. Usually, the employee must reimburse the employer for private fuel included in petrol bills paid by the employer. Otherwise, the employee may face a tax charge.
Do you pay tax on company fuel?
A company car fuel benefit is a tax that’s charged to you for using the fuel that’s paid for by your employer, which is why HMRC regards it as free fuel. It will, therefore, still cost you to receive the fuel as this tax still need to be paid.
How is company car fuel benefit calculated?
The fuel benefit charge is calculated by multiplying the fuel benefit charge multiplier by the car’s appropriate percentage; that is the CO₂ emissions derived percentage used to calculate the car benefit charge, including any diesel supplement.
How does the company pay for private fuel?
It is likely the employee will pay for fuel on the company credit card so my question is how the private fuel will be paid for as the company will not be paying for this. Is the easiest way to allow the employee to put all fuel on the company credit card, and record business trips.
Is the fuel benefit charged to the employee?
The fuel benefit charges do not apply to fuel provided for use in an employee’s own vehicle, or in a vehicle hired by the employee. The expense incurred by an employer (or another person on behalf of the employer) in providing fuel for any such vehicle is taxable upon the employee. See also Chapter 16.
Do you pay tax on company car fuel?
If the mileage allowance is excessive, but it’s only paid for genuine business travel, the ‘profit element’ will be chargeable to tax in the normal way. However, a car fuel benefit charge will arise where, for instance, the payments to the employee cover travel between home and work.
Can a company reimburse you for a fuel card?
This is true in both cases of whether you provide your employees with a fuel card or reimburse them for their business journeys only. In practice, all company car drivers are likely to clock up some private mileage, e.g. to or from home and their normal place of work.
