Company Car Tax And Fuel Tax

[imd123]

I have had a company car for the 15 years I have been with my existing employer. Until last month I had always made a payment directly from my wages to the company for private fuel used. The company now say (after a visit from taxman) that I must pay tax instead.

Problem is the fuel benefit is �3456.00 which I will have to pay at 40%. I only put about �50.00 fuel in per week for business and personal mileage.

Does anyone know if I have to pay the tax or if I can just pay for private mileage? I hardly use the car privately so feel very hard done by this.

Also, if I were to buy my own car should the company make a payment in my salary in lieu of this. I have asked and they say no but can't understand why as they would obvoiusly make a terrffic saving. If so any idea how much annual payment ought to be please? My existing car has an on the road value of �26,000.

Thanks to anyone who replies.

Many thanks

[johnny37]

The taxman obviously thinks you are benefittiing from this arrangement. Have you any idea how much business mileage you do? You should keep a record of all your business mileage (not private) and claim a mileage allowance. Not sure how this is calculated but the tax office should know. My company pays 40p per mile. It is based on the running costs per mile which includes petrol, road tax, maintenance and depreciation. It is not taxable as it is a genuine business expense.

[johnny37]

Sorry, that is if you use your own car.

[Le Chat]

Your firm are a bit tight - they should be paying for all your fuel, company and private use ... especially after 15 yrs!!
Sorry my answer is of no help whatsoever.

[BenDToy]

Le Chat is missing the point as I am sure you appreciate. I would guess you no longer want the company to pay your private fuel because the tax is more than the value of the benefit, and it is a fixed sum for a specific car.
There are a number of ways to achieve this. Some suggestions - pay for all of your own fuel and claim back the business mileage at a pre-determined rate (the IR have some guidelines for this), or the company can pay for all of your fuel and you then pay the company for your private fuel at this rate. I do the former, and recently my company has now agreed to pay me a sum (�50/month) in lieu of private mileage so I win both ways!
Note - I have done the sums for buying my own car, and it is not clear cut. There are calculators on some web sites. Google "company car tax" and one should come up.
Most people now accept that fuel benefit is not a viable option unless you do about 12,000 private miles a year on 40%.

[Dassie]

Also remember that travelling to and from work is considered private mileage, not just when you go to the shops or out for the weekend. Everyone has to make their own way to work - the company does not normally pay this expense hence it is considered private travel and is taxable.