Fuel card but no company car - how is private use taxed?

[texasjohn]

I'm a bit confused.

If you have a company car and fuel card with private use benefit, you get taxed on the car and taxed on the fuel card.

What about if you opt out of the company car, buy your own car but retain a fuel card with private use benefits? Do you still pay tax on the fuel benefit in the same way, i.e. worked out as a percentage of £20,200, such percentage being dependent on the CO2 emissions of your car?

So, driving 600-800 'private' miles a week in a top CO2 band car, would I have a tax code impact equal to 35% of £20,200 per year for the benefit of free fuel, regardless of how much fuel I used each year?

Just seems like a very cheap way to fuel a V8 if I do the sums...

[northandy]

No, my understanding is you pay tax on all the fuel you buy, so if you spent 5k and were a 40% tax payer it would cost you £2k in tax.

You can then offset business miles at the fuel only rates of 15-18p a mile, or whatever they are now.

At least thats my understanding of a fuel card with a privately owned car.

[texasjohn]

Thank you

I think you are right (I posted and then went off and did some searching) see the bottom of this thread...C8PPOs posts...

http://www.pistonheads.com/gassing/topic.asp?h=0&a... card benefits......?

Although I think I might be able to offset the business miles at 45ppm and 25ppm rates as it is a privately owned car.

Maybe a V8 isn't such a good idea after all, however that said, it's an effective 60% off the price of petrol.

Edited by texasjohn on Friday 16th November 20:47

[northandy]

texasjohn said:

Thank you

I think you are right (I posted and then went off and did some searching) see the bottom of this thread...C8PPOs posts...

http://www.pistonheads.com/gassing/topic.asp?h=0&a... card benefits......?

Although I think I might be able to offset the business miles at 45ppm and 25ppm rates as it is a privately owned car.

Maybe a V8 isn't such a good idea after all, however that said, it's an effective 60% off the price of petrol.

Edited by texasjohn on Friday 16th November 20:47

Your probably right on the rates thinking about it, im confusing it with me claiming the fuel only rate from work (as i get an allowance) but i claim the different on my tax return.

[bogie]

the fuel benefit in money is shown on your P11D each year as "other benefits" - the total cost of fuel youve had is effectively added to your salary so you are taxed on it as normal

then you do your self assesment (online is good) and put this figure in

in "business expenses" you put the business miles you did at current rates e.g. 10,000 miles @ 45p and 5000 miles @25p = total expense £5750

the taxmans software works out what he owes you and you choose to have it built into your tax code for future years, or a refund sent by cheque/bank transfer ..usually in a matter of days as the self assessment online is very efficient like that

You do need to keep a record of business miles for 5 years, and show the working out in the comments box on tax return is helpful, also reg of car, start/finish miles for the year. Saves them asking questions later

personally I just take the refund as my yearly business mileage is variable...you dont want to get to the end of the year and not have driven the same as previous years and end up owing money...I always prefer to be "in credit" as it were and due a nice refund...usually pays for a car to be serviced or a set of tyres

[uk89camaro]

As above.

Ran a 2001 V8 Mustang on a fuel card for 6 years quite successfully. Was doing 30k miles a year with about 10k private. Would normally end up with the taxman giving me money back.

[texasjohn]

There is also a cashflow advantage to this; you pay for no fuel all year then sort the tax out at year end.