Petrol Card the pros and cons

[simplyred50]

Hi,

I've recently been offered a new job where I get a petrol card. After the initial excitement this has now died down as it doesn't seem to be such a good deal.

In my new job I get a car allowance and a petrol card. I've read lots of different things about this online but can't get a consistent answer.

Does anyone here know what the tax implications are of this?

Many thanks

[Soov330e]

simplyred50 said:

Hi,

I've recently been offered a new job where I get a petrol card. After the initial excitement this has now died down as it doesn't seem to be such a good deal.

In my new job I get a car allowance and a petrol card. I've read lots of different things about this online but can't get a consistent answer.

Does anyone here know what the tax implications are of this?

Many thanks

Yes.

If you take the card you get unlimited fuel for private and business use and you don't have to record your mileage for business.

You pay tax on this benefit.



Assuming you are a 40% taxpayer, you will pay

40% x £22700 x BIK %age of your car - the 22700 is a figure set each year in the budget. It'll be more next year.



So for my 330e (BIK 7%) your price for unlimited fuel will be

0.4 x 22700 x .07 = £635 a year or £53 a week


Previously my 535d (BIK 22%)my price for unlimited fuel was

0.4 x 22700 x .22 = £1997 a year or £166 a week (cost of two tanks)


Obviously if you're a low rate taxpayer you use 20% in the calculation and it's more attractive.


Well worth it for me, as I have a long commute and I use three tanks a week. There's a point at which it becomes worthwhile depending on how much you would put in the tank each week if you paid for it yourself.



Can you tell why I've ordered a hybrid this time

Calculator here

http://comcar.co.uk/fuel/benefit/

Edited by Soov330e on Monday 13th March 11:34

[Over over under steer]

Soov330e said:

simplyred50 said:

Hi,

I've recently been offered a new job where I get a petrol card. After the initial excitement this has now died down as it doesn't seem to be such a good deal.

In my new job I get a car allowance and a petrol card. I've read lots of different things about this online but can't get a consistent answer.

Does anyone here know what the tax implications are of this?

Many thanks

Yes.

If you take the card you get unlimited fuel for private and business use and you don't have to record your mileage for business.

You pay tax on this benefit.



Assuming you are a 40% taxpayer, you will pay

40% x £22700 x BIK %age of your car - the 22700 is a figure set each year in the budget. It'll be more next year.



So for my 330e (BIK 7%) your price for unlimited fuel will be

0.4 x 22700 x .07 = £635 a year or £53 a week


Previously my 535d (BIK 22%)my price for unlimited fuel was

0.4 x 22700 x .22 = £1997 a year or £166 a week (cost of two tanks)


Obviously if you're a low rate taxpayer you use 20% in the calculation and it's more attractive.


Well worth it for me, as I have a long commute and I use three tanks a week. There's a point at which it becomes worthwhile depending on how much you would put in the tank each week if you paid for it yourself.



Can you tell why I've ordered a hybrid this time

Calculator here

http://comcar.co.uk/fuel/benefit/

Edited by Soov330e on Monday 13th March 11:34

/thread

[Alucidnation]

fk the petrol card.

Top Lurking!

[General Fluff]

Soov330e said:

Yes.

If you take the card you get unlimited fuel for private and business use and you don't have to record your mileage for business.

You pay tax on this benefit.



Assuming you are a 40% taxpayer, you will pay

40% x £22700 x BIK %age of your car - the 22700 is a figure set each year in the budget. It'll be more next year.



So for my 330e (BIK 7%) your price for unlimited fuel will be

0.4 x 22700 x .07 = £635 a year or £53 a week


Previously my 535d (BIK 22%)my price for unlimited fuel was

0.4 x 22700 x .22 = £1997 a year or £166 a week (cost of two tanks)


Obviously if you're a low rate taxpayer you use 20% in the calculation and it's more attractive.


Well worth it for me, as I have a long commute and I use three tanks a week. There's a point at which it becomes worthwhile depending on how much you would put in the tank each week if you paid for it yourself.



Can you tell why I've ordered a hybrid this time

Calculator here

http://comcar.co.uk/fuel/benefit/

Edited by Soov330e on Monday 13th March 11:34

From the link:

"Who this applies to?

Fuel benefit can only apply to drivers of a vehicle supplied by their employer."

OP has an allowance not a company car

[Soov330e]

General Fluff said:

Soov330e said:

Yes.

If you take the card you get unlimited fuel for private and business use and you don't have to record your mileage for business.

You pay tax on this benefit.



Assuming you are a 40% taxpayer, you will pay

40% x £22700 x BIK %age of your car - the 22700 is a figure set each year in the budget. It'll be more next year.



So for my 330e (BIK 7%) your price for unlimited fuel will be

0.4 x 22700 x .07 = £635 a year or £53 a week


Previously my 535d (BIK 22%)my price for unlimited fuel was

0.4 x 22700 x .22 = £1997 a year or £166 a week (cost of two tanks)


Obviously if you're a low rate taxpayer you use 20% in the calculation and it's more attractive.


Well worth it for me, as I have a long commute and I use three tanks a week. There's a point at which it becomes worthwhile depending on how much you would put in the tank each week if you paid for it yourself.



Can you tell why I've ordered a hybrid this time

Calculator here

http://comcar.co.uk/fuel/benefit/

Edited by Soov330e on Monday 13th March 11:34

From the link:

"Who this applies to?

Fuel benefit can only apply to drivers of a vehicle supplied by their employer."

OP has an allowance not a company car

Quite right - I stand corrected.

[General Fluff]

When I was in the OP's position a few years ago, we were taxed on all the fuel purchased as if it were benefit in kind. Than we offset the business mileage as an expense at 45p/mile on our tax returns.

Depending on the personal/business split, either you would end up owing HMRC a bit or they would owe you a rebate. It was a very nice perk either way.

[s2sol]

Your weeks appear to last as long as my, and I suspect many other people's months.

[TwigtheWonderkid]

As above, it can be a great deal if you have a thirsty car/long commute/heavy private mileage. Or a terrible deal if you have an eco box and a short commute.

[jonwm]

I gave mine back earlier this year when I became a home worker, on an A5 Ultra (109co2) it cost me £149 a month, I average about 600 private miles a month so it was no way a benefit any longer.

Back in the day 10 plus years ago it was a huge perk, even more so at 20% tax.

Commenting on the above note, our company will give you a fuel card on a private owned vehicle if you take cash allowance, it is taxed at the normal rates based upon co2 etc.

[rsbmw]

I'm on the same deal. Assuming the fuel card covers both personal and business mileage, the whole amount will show up on your P11D with the effect that you pay your tax rate on the 'benefit', and you claim relief on the business portion. An example, taking tax rate at 40%;

2k spend on fuel, leading to 800 quid to be paid in tax at the end of the tax year
2k business miles, can be offset at the full 45p per mile against tax, 2000 * .45 * .4 = 360 quid offset

tax bill for the years petrol usage of 440 quid - bargain.

[BFG TERRANO]

I've opted out of a fuel card. First time in years. Much better off. I claim back mileage in line with hmrc guidelines. It works well and costs are covered. Yes I pay for private use fuel but it's better for me as I don't do many miles privately in the company car.

[edc]

If you don't do any business mileage or very limited business mileage and commute to the same office 99% of the time then the fuel card where you use your own car is effectively fuel at a discounted rate.

If you are logging your business mileage, perhaps through a cloud system provided by the fuel card provider, then you should pay no BIK on the fuel card as typically with this approach the private fuel spend is calculated and deducted via payroll.

[Sy1441]

When I got my first company car I had no idea that you paid tax on the car or fuel card, I managed to acquire an Audi S5 from the car pool. That was a costly lesson learned haha!

Log my mileage now and submit it monthly and pay for my private mileage as a % of the fuel purchased.

[Jag_NE]

Soov330e said:

simplyred50 said:

Hi,

I've recently been offered a new job where I get a petrol card. After the initial excitement this has now died down as it doesn't seem to be such a good deal.

In my new job I get a car allowance and a petrol card. I've read lots of different things about this online but can't get a consistent answer.

Does anyone here know what the tax implications are of this?

Many thanks

Yes.

If you take the card you get unlimited fuel for private and business use and you don't have to record your mileage for business.

You pay tax on this benefit.



Assuming you are a 40% taxpayer, you will pay

40% x £22700 x BIK %age of your car - the 22700 is a figure set each year in the budget. It'll be more next year.



So for my 330e (BIK 7%) your price for unlimited fuel will be

0.4 x 22700 x .07 = £635 a year or £53 a week


Previously my 535d (BIK 22%)my price for unlimited fuel was

0.4 x 22700 x .22 = £1997 a year or £166 a week (cost of two tanks)


Obviously if you're a low rate taxpayer you use 20% in the calculation and it's more attractive.


Well worth it for me, as I have a long commute and I use three tanks a week. There's a point at which it becomes worthwhile depending on how much you would put in the tank each week if you paid for it yourself.



Can you tell why I've ordered a hybrid this time

Calculator here

http://comcar.co.uk/fuel/benefit/

Edited by Soov330e on Monday 13th March 11:34

166 a month not per week.

a lot of folk will do a tank a week+ so 166 a month is still worthwhile.

obviously the ev savings are massive versus diesel as you point out

[Soov330e]

Edited cos I am thick!

Jag_NE said:

Soov330e said:

simplyred50 said:

Hi,

I've recently been offered a new job where I get a petrol card. After the initial excitement this has now died down as it doesn't seem to be such a good deal.

In my new job I get a car allowance and a petrol card. I've read lots of different things about this online but can't get a consistent answer.

Does anyone here know what the tax implications are of this?

Many thanks

Yes.

If you take the card you get unlimited fuel for private and business use and you don't have to record your mileage for business.

You pay tax on this benefit.



Assuming you are a 40% taxpayer, you will pay

40% x £22700 x BIK %age of your car - the 22700 is a figure set each year in the budget. It'll be more next year.



So for my 330e (BIK 7%) your price for unlimited fuel will be

0.4 x 22700 x .07 = £635 a year or £53 a month


Previously my 535d (BIK 22%)my price for unlimited fuel was

0.4 x 22700 x .22 = £1997 a year or £166 a month (cost of two tanks)


Obviously if you're a low rate taxpayer you use 20% in the calculation and it's more attractive.


Well worth it for me, as I have a long commute and I use three tanks a week. There's a point at which it becomes worthwhile depending on how much you would put in the tank each week if you paid for it yourself.



Can you tell why I've ordered a hybrid this time

Calculator here

http://comcar.co.uk/fuel/benefit/

Edited by Soov330e on Monday 13th March 11:34

166 a month not per week.

a lot of folk will do a tank a week+ so 166 a month is still worthwhile.

obviously the ev savings are massive versus diesel as you point out

[davek_964]

My previous job I had car allowance and fuel card with no business mileage at all. I really miss it - the disadvantage being that I only paid 40% of my petrol costs, but all in a single payment at the end of the financial year as part of the tax return. Suddenly paying a ~£2,500 petrol bill was a bit miserable even if you did know it was a good deal.

[CAPP0]

General Fluff said:

When I was in the OP's position a few years ago, we were taxed on all the fuel purchased as if it were benefit in kind. Than we offset the business mileage as an expense at 45p/mile on our tax returns.

Depending on the personal/business split, either you would end up owing HMRC a bit or they would owe you a rebate. It was a very nice perk either way.

Same for me, previous employer. I was running a Monaro when they made me the offer. "You DO know what I drive, don't you?", says I. Yep, crack on, was the response!

Few years later I chopped the Monaro in for a petrol FFRR

As long as you do the business miles it works. I often got a 4-figure rebate back when I did my tax return.

[blank]

Is there ever a situation where a fuel card for a privately owned car is a bad idea?

It's pretty much just a straight 55/60/80 % discount on all your fuel?

[simplyred50]

Thanks for your help on this. I was hoping that this might present and opportunity to offload the existing car, a 640d coupe to something bigger and more exiting. I won't have a big commute so this is a trade off against my current deal where all business mileage is expensed at 45p per mile. I do pretty well out of this and I think I'll probably break even against the current deal. The tax breaks on hybrids is unreal!!!