Company fuel card/private car
Discussion
Would anyone know the tax rules regarding using your own car for work whilst having a company fuel card provided?
How does HMRC work out the tax for the private miles travelled? (40% tax payer)
Is there a set yearly £amount and then taxed at 40% or is it much more complicated than that?
Searched HMRC website but I'm just getting confused....
Thanks in advance.
How does HMRC work out the tax for the private miles travelled? (40% tax payer)
Is there a set yearly £amount and then taxed at 40% or is it much more complicated than that?
Searched HMRC website but I'm just getting confused....
Thanks in advance.
Had exactly this circumstance in my last job, left March 2007.
The full value of the fuel charged to the card was declared on the P11D as a benefit, box 1.15 if I remember correctly.
Then in Box 1.32 you claim the Inland Revenue business mileage rates which was £0.40 per mile for the first 10,000 miles and then £0.25 per mile thereafter.
The full value of the fuel charged to the card was declared on the P11D as a benefit, box 1.15 if I remember correctly.
Then in Box 1.32 you claim the Inland Revenue business mileage rates which was £0.40 per mile for the first 10,000 miles and then £0.25 per mile thereafter.
Edited by sgrimshaw on Tuesday 23 February 20:53
swerni said:
Depends on how your company manage the scheme.
The way ours works is we have a monthly deduction of £80 to cover our personal mileage (this is irrespective of car, thankfully). This is an amount HMRC have agreed with the company. This in turn means that we use the card for all our business and personal mileage without it being classed as a benefit.
At the end of the tax you claim the mileage back on your tax return as usual.
If by that you mean that you currently claim the mileage allowance of £0.40 per mile etc as in my previous post then that is not correct.The way ours works is we have a monthly deduction of £80 to cover our personal mileage (this is irrespective of car, thankfully). This is an amount HMRC have agreed with the company. This in turn means that we use the card for all our business and personal mileage without it being classed as a benefit.
At the end of the tax you claim the mileage back on your tax return as usual.
Either the value of fuel, less the £80 per month, should still be classed as a benefit on the P11D, and you claim the £0.40 etc, or the mileage amount you claim should be reduced to remove the fuel element.
sgrimshaw said:
Had exactly this circumstance in my last job, left March 2007.
The full value of the fuel charged to the card was declared on the P11D as a benefit, box 1.15 if I remember correctly.
Then in Box 1.32 you claim the Inland Revenue business mileage rates which was £0.40 per mile for the first 10,000 miles and then £0.25 per mile thereafter.
exactly how mine has been done for the last 6 yearsThe full value of the fuel charged to the card was declared on the P11D as a benefit, box 1.15 if I remember correctly.
Then in Box 1.32 you claim the Inland Revenue business mileage rates which was £0.40 per mile for the first 10,000 miles and then £0.25 per mile thereafter.
Edited by sgrimshaw on Tuesday 23 February 20:53
I use the card for all my fuel
fuel is a benefit
I keep a record of business miles and claim those as an expense at the usual rates .40p for 10K and .25p after that
usually it works out so they owe me money, enough to service my car, and Ive had "free" fuel all year
running my own car, with a cash allowance + fuel card is definately the best option for me rather than a company car and fuel card, taxed on CO2 ...it actually makes it cost effecient to run a V8 for work LOL
swerni said:
sgrimshaw said:
swerni said:
Depends on how your company manage the scheme.
The way ours works is we have a monthly deduction of £80 to cover our personal mileage (this is irrespective of car, thankfully). This is an amount HMRC have agreed with the company. This in turn means that we use the card for all our business and personal mileage without it being classed as a benefit.
At the end of the tax you claim the mileage back on your tax return as usual.
If by that you mean that you currently claim the mileage allowance of £0.40 per mile etc as in my previous post then that is not correct.The way ours works is we have a monthly deduction of £80 to cover our personal mileage (this is irrespective of car, thankfully). This is an amount HMRC have agreed with the company. This in turn means that we use the card for all our business and personal mileage without it being classed as a benefit.
At the end of the tax you claim the mileage back on your tax return as usual.
Either the value of fuel, less the £80 per month, should still be classed as a benefit on the P11D, and you claim the £0.40 etc, or the mileage amount you claim should be reduced to remove the fuel element.
I claim 40p per mile for my business mileage
Is it a long-standing arrangement? Could be HMRC doesn't really realise what's going on.
swerni said:
No the company bill is a flat rate of £80 per month to cover our private mileage.
I claim 40p per mile for my business mileage
The £80 per month for private fuel is immaterial to the business mileage claim, you are simply reimbursing your employer for the private fuel.I claim 40p per mile for my business mileage
The balance of the fuel purchased on the fuel card is for business miles in your vehicle.
If for some reason your employer does not show this on the P11D then you should be declaring it as the amount paid by your employer to you for the business miles you have done.
By claiming the full allowance and NOT declaring the fuel paid for by your employer you are underpaying tax by overclaiming the tax relief.
The HMRC will be expecting your employer to be declaring the amount charged through the fuel card on your P11D, which may be why they suggested you should be claiming the full AMAP.
sgrimshaw said:
By claiming the full allowance and NOT declaring the fuel paid for by your employer you are underpaying tax by overclaiming the tax relief.
The HMRC will be expecting your employer to be declaring the amount charged through the fuel card on your P11D, which may be why they suggested you should be claiming the full AMAP.
Doubt it - it seems no different to the arrangement we had with company cars and fuel cards - we paid £50 per month and HMRC deemed this as full repayment for the private element.The HMRC will be expecting your employer to be declaring the amount charged through the fuel card on your P11D, which may be why they suggested you should be claiming the full AMAP.
In reality many people's private fuel bills were insanely more than this - especially the office based people who all seemed to commute a long way and did zero business miles.
In the end the company bought everyone out of company cars by giving them a monthly allowance that was too good to refuse. They got a bit upset though when people who'd had 5 Series and A6 company cars went out and bought used Astras and stuck most of the allowance on their back pockets!
At some point HMRC might review the arrangement but there are so few tax inspectors left now that that's unlikely. More likely is the company will realise and, probably under the guise of doing something green, will change the arrangement.
Edited by Deva Link on Tuesday 23 February 22:47
By paying the £80 per month there is no taxable benefit on the Private fuel, since it is being reimbursed.
The poster is overclaiming for Business mileage, since he claims the full 40p/25p and doesn't declare the amount paid by the employer for business fuel.
The maximum tax free amount is the 40p/25p, these rates include fuel.
The poster is overclaiming for Business mileage, since he claims the full 40p/25p and doesn't declare the amount paid by the employer for business fuel.
The maximum tax free amount is the 40p/25p, these rates include fuel.
For the last time.
The £80 per month is the employee paying for his private fuel.
If he didn't do that then there would be a taxable benefit of private fuel since the company would be paying for it.
It is not uncommon for HMRC to agree to a flat rate for everyone - there are winners and losers.
This £80 is not relevent to any claim for Business Mileage , forget it.
The maximum amount payable by the employer for Business Miles is the AMAP rate. Any more and you pay tax on the excess, any less and you can claim it as Tax Relief.
In this case, the employer is paying for the business fuel, so there is a claim for the difference between that value and the miles x 40p/25p.
In the poster's case he is not declaring the BUSINESS fuel paid for on the card AND he is claiming the full mileage rates as tax relief.
The poster is underdeclaring tax due by overstating the claim for business mileage allowance.
The £80 per month is the employee paying for his private fuel.
If he didn't do that then there would be a taxable benefit of private fuel since the company would be paying for it.
It is not uncommon for HMRC to agree to a flat rate for everyone - there are winners and losers.
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This £80 is not relevent to any claim for Business Mileage , forget it.
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The maximum amount payable by the employer for Business Miles is the AMAP rate. Any more and you pay tax on the excess, any less and you can claim it as Tax Relief.
In this case, the employer is paying for the business fuel, so there is a claim for the difference between that value and the miles x 40p/25p.
In the poster's case he is not declaring the BUSINESS fuel paid for on the card AND he is claiming the full mileage rates as tax relief.
The poster is underdeclaring tax due by overstating the claim for business mileage allowance.
sgrimshaw said:
The maximum amount payable by the employer for Business Miles is the AMAP rate. Any more and you pay tax on the excess, any less and you can claim it as Tax Relief.
In this case, the employer is paying for the business fuel, so there is a claim for the difference between that value and the miles x 40p/25p.
In the poster's case he is not declaring the BUSINESS fuel paid for on the card AND he is claiming the full mileage rates as tax relief.
The poster is underdeclaring tax due by overstating the claim for business mileage allowance.
It would be logical to at least deduct the Advisory Fuel Rates from the AMAP rates when making the claim, but it's not clear there's any requirement to do that.In this case, the employer is paying for the business fuel, so there is a claim for the difference between that value and the miles x 40p/25p.
In the poster's case he is not declaring the BUSINESS fuel paid for on the card AND he is claiming the full mileage rates as tax relief.
The poster is underdeclaring tax due by overstating the claim for business mileage allowance.
In practice I would claim the lot and worry about it if they ever notice - they can only go back 6 years anyway. As swerni's employer seems quite large they'd probably compensate employees if they've advised them badly.
Deva Link said:
they can only go back 6 years anyway.
Not a level playing field, "quelle surprise"An individual can only go back 6 years to claim overpaid tax.
HMRC can go back as far as they please to claim underpaid tax, although it is rare for them to go back more than 6 years.
However if they suspect fraud, look out ..... 20 years is not unheard of.
sgrimshaw said:
Deva Link said:
they can only go back 6 years anyway.
Not a level playing field, "quelle surprise"An individual can only go back 6 years to claim overpaid tax.
HMRC can go back as far as they please to claim underpaid tax, although it is rare for them to go back more than 6 years.
However if they suspect fraud, look out ..... 20 years is not unheard of.
Zip106 said:
I guess I'd better talk to my accountant.
Thanks for the replies but I'm still none the wiser!
Is there anywhere on the HMRC website that gives any info in layman's terms?
What does your employer say? What do your colleagues do?Thanks for the replies but I'm still none the wiser!
Is there anywhere on the HMRC website that gives any info in layman's terms?
Basically your employer should declare to HMRC the value of fuel that you use for private use (so that would be all fuel minus the amount used for business). OR - the more typical way, is that you repay your employer for private fuel at the Advisory Fuel Rates.
You can then claim for your business miles at 40p for the first 10K and 25p for all miles over 10K minus the Advisory Fuel Rates (although swerni doesn't seem to do that bit!).
swerni said:
it's all very confusing.
So if I claim 40p per mile for the first 10k that equates to £4000.
That then means I don't pay tax on that £4k therefore I see a return of £1600 for those 10k miles.
So in effect I get back 16p per mile.
I get about 19mpg so I see a return of £3.04 per gallon against a cost of £5.42.
So even without running costs I am would be down £2.38 per gallon.
Surely that can't be right.
Maybe you're right, although of course, "they" would argue that they're not going to support someone driving a car that does 19MPG. And there was talk of doing away with the 40p rate, although uproar in the NHS, where they actually get paid the full 40p and said even that wasn't enough, put paid to discussions about reducing it.So if I claim 40p per mile for the first 10k that equates to £4000.
That then means I don't pay tax on that £4k therefore I see a return of £1600 for those 10k miles.
So in effect I get back 16p per mile.
I get about 19mpg so I see a return of £3.04 per gallon against a cost of £5.42.
So even without running costs I am would be down £2.38 per gallon.
Surely that can't be right.
Fuel (at least around here) is £1.10/L, which is exactly a fiver a gallon, so at the moment your 19MPG car is costing your employer 26.3p per mile in fuel. Even the Advisory Fuel rates are only 20p per mile for petrol cars over 2L.
I suspect that you should be only claiming for 20p per mile, therefore you would get your petrol paid for, and you'd get back 8p per mile in tax rebate to cover the running costs, although that's nothing like enough. Of course the capital costs are covered by your monthly car allowance.
The thing is, even if what you're doing now is wrong (and I'm not sure it is) then your underpayment isn't massive (£800 if you do 10K miles per year) so I'd carry on as you are.
As I said earlier, a bigger issue is likely to be that your employer will have some kind of green frenzy if they realise how much per mile you're costing them.
I'm actually enquiring on behalf of my wife. (she's out of the country for the week)
She's possibly going to opt out of the company car scheme and take the money (around £700 pm) but would also get a company fuel card.
I was just dipping my toe in the water before she actually gets to speak to someone at her company that can actually give a definitive answer.
She's possibly going to opt out of the company car scheme and take the money (around £700 pm) but would also get a company fuel card.
I was just dipping my toe in the water before she actually gets to speak to someone at her company that can actually give a definitive answer.
if you do 10,000 business miles you get £4000 back if its a pure expense
its only offset if your employer has paid you in addition in some way ie.. fuel card, mileage rate or such like
if your employer doesnt give you anything and you 10K business miles, you get £4000 back, not £1600
if you employer pays you £100 a month, so £1200 a year and you do 10K bus miles, you get £4000-1200 = £3600 back
you are incurring expenses without being fully reimbursed, so you dont pay tax at all on the expense amount
...at my company, to keep it simple, they just give us fuel cards, and we sort out our own tax - it saves them the overhead of adminstering mileage claims for loads of sales staff ...
its only offset if your employer has paid you in addition in some way ie.. fuel card, mileage rate or such like
if your employer doesnt give you anything and you 10K business miles, you get £4000 back, not £1600
if you employer pays you £100 a month, so £1200 a year and you do 10K bus miles, you get £4000-1200 = £3600 back
you are incurring expenses without being fully reimbursed, so you dont pay tax at all on the expense amount
...at my company, to keep it simple, they just give us fuel cards, and we sort out our own tax - it saves them the overhead of adminstering mileage claims for loads of sales staff ...
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