Fuel card

[CupOfTeaAndAbiscuitPlease]

Hi. My DH started his new job yesterday. He gets a company car and fuel card.

I have tried googling but found it all very confusing. How does the tax work on these benefits?

He has been told that once a month he has to log all his miles indicating which is business and which is personal and then he will receive a tax bill.

In regards to the fuel, will he end up paying more in tax than the original personal fuel would have cost? In which case I don't see this as a "benefit"!

Many thanks

[Lonecatwithkitten]

Are they supplying all fuel personal and business or does he need to repay his personal fuel?

[Sherborne]

I have a fuel card. After business miles are subtracted, the personal element goes on my annual p11d. On the one hand, as a (just) higher rate tax payer it costs a bit more, but on the other hand, there's a value to not having to budget for fuel, knowing that at the end of the month I don't have to scrape around to fill up the tank. And then the extra just gets covered by my tax code changes.

And of course he doesn't need to use the fuel card. If you're taking a private journey across the country for example, just fill up and pay for it yourself.

[CupOfTeaAndAbiscuitPlease]

Lonecatwithkitten - all fuel. Although he still has his own car which he'll use to ferry his beloved bike in when going to races.

[CupOfTeaAndAbiscuitPlease]

Nothing has been said about repaying the fuel. Only that he has to submit the business and personal miles for tax purposes

[CupOfTeaAndAbiscuitPlease]

He is on £45,000 plus car/fuel card. Does that make him a higher or lower rate payer?

[daisychain01]

£43000 of his salary will be taxed at basic rate tax. He will pay higher rate of 40% tax on £2000 only

[daisychain01]

Basic rate being 20%

[daisychain01]

cupoftea best way is for your OH to keep mileage records and do his best to show the tax office he is paying for private fuel himself. Best not to use the card if he is filling up for the weekend for example.

The tax office wont forensically examine every receipt and every private mile he does so provided he is seen to be diligent in separating business from private fuel, he will be fine. The tax office have bigger fish to fry

[daisychain01]

Sorry sherborne X posted!

[Bovneydazzlers]

You've got to do a huge amount of personal miles to make taking the personal fuel benefit worth it, particularly as he also has his own car. Similarly for the company car benefit, if he has his own, would he be better using that solely for business to save the (circa £2k?) tax charge per year?

The fact that his company are asking him to log separately his business fuel mileage means they are likely to give him a choice whether he repays back each month personal fuel use or not. My husband has a fuel card and is charged 10p per mile by the company for personal useage.

Get your husband to estimate personal fuel usage in company car and work out what's best (I'd strongly suspect it's paying for it yourself).

[Tequilamockinbird]

Company car tax is worked out based on the emissions of the car, and the value of it (when new). It can be very expensive. I don't have a fuel card, and wouldn't have one either.

Unless he's doing a huge amount of personal miles, the tax liability will probably be more than the fuel cost!

[IamNotDarling]

Remember that commuting is private mileage, not business.

[HermioneWeasley]

It's a really complicated area and you'll need to find out what the specific arrangements are for him in his company (you can have different arrangements within the same company)

If he's on a scale charge (a standard amount of tax applied) he'd have to use an enormous amount of private fuel to make it worthwhile, but if he's being taxed on usage only, it's worth it.

[CupOfTeaAndAbiscuitPlease]

Many thanks everyone.

His commute to work is 63miles so 126 per day.

[Mummyreindeerlegz]

Our fleet manager did a calculation for us at to where our breakeven point was at taking private fuel benefit. I always opted out and then repaid my private miles each month through our expenses system. That should be an option?

[CupOfTeaAndAbiscuitPlease]

I don't know. It's only day 2 today so DH is trying to learn more about the job at the moment rather than asking about this sort of stuff. I am just a worrier with things like this as I don't understand it and I like to know exactly what the implications are

[Okkitokkiunga]

If you look on the hmrc website there used to be a calculator where you could work out how much you'd end up paying. You need salary and car details.

[HermioneWeasley]

cupoftea I work in this area. He needs to know if he's on a scale charge or "taxed as you go" before he can decide if it's worth it.

[Hoppinggreen]

His commute to work is actually private mileage, unless he actually works from home normally so just watch out for that.
Of course if he has another car his Private mileage for his company car may be quite low anyway. When I had a similar arrangement very few of the miles I did were declared as " personal"

[CupOfTeaAndAbiscuitPlease]

He will be using the company car to go to and from work so that he can keep the wear and tear off of his own.

When he was offered the job he was told the fuel card is for business miles only and to only use it for that. Since he started he was told it is for personal use too but he has to submit how many miles he does for business and pleasure.