Car fuel benefit charge

News: January 2015

Car fuel benefit charge

Employees and directors with company cars and who also have some or all of their private fuel paid for by their employers are subject to the fuel benefit charge – on an all or nothing basis. The benefit charge is determined by multiplying a notional list price by the appropriate percentage for the car, based on its CO2 emissions.

The car fuel notional list price will increase from £21,700 to £22,100 with effect from 6 April 2015, notwithstanding the actual fall in fuel prices in the current tax year, so this is another attempt to stop employers providing any private use fuel. For a company car emitting between 121g to 125g CO2 per km the scale charge would be 20% of £22,100 and this would result in taxable fuel benefit of £4,420 and £1,768 income tax for a 40% taxpayer. At 11p per mile the employee would need to drive 16,073 private miles to make having private fuel paid for worthwhile.

Private use of company vans

Where employees are provided with a company van the taxable benefit increases from £3,090 to £3,150 for 2015/16 and there will be an additional taxable benefit of £594 where private fuel is provided by their employer. Note that this charge does not apply to all company van drivers, only those who use the van for private journeys.

Company car advisory fuel rates

Not part of the Autumn Statement, but you need to know that some of the rates are reduced from 1 December 2014 (previous rates in brackets where there was a change):

engine size petrol diesel LPG
1,400 cc or less 13p (14p) 9p
1,600 cc or less 11p
1,401cc to 2,000cc 16p 60% 11p
1,601cc to 2,000cc 13p
over 2,000cc 23p (24p) 16p (17p) 16p

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