Company Car Tax and Fuel Benefits

[imd123]

Until recently I have made a contribution from my wages in lieu of diesel used in my company car. The inland revenue (according to my employer) now insist that this can not be done and I must be taxed instead.

Firstly is this correct and secondly how much will my tax be? I have a Volvo S60 2.4 ltr diesel car.

Thanks to anyone who replies. I have looked on income tax website but can't find the answer!

[rugeleyboy]

i would also post this in the business section,some company boss may have gone through this before?

i am sorry but i have not got an answer for you.

[Buenchico]

HMRC provide on online calculator to help you. This will calculate the 'benefit in kind' value of the car. How much tax you'll pay will depend upon your tax band. Unless you're earning so much that you pay the higher rate of tax, your tax bill will be 22% of the benefit in kind:
http://cccfcalculator.inlandrevenue.gov.uk/CCF 0.aspx

Chris

[BenDToy]

I am assuming that you are referring to the private fuel benefit, rather than the car itself. You need to agree with your employer how to pay for your private fuel. This will mean keeping a record of all business mileage and having your employer pay only for that proportion of your fuel. There are a variety of ways this can be done. I pay for all of my fuel, and then charge busienss miles to my employer at a defined rate. Alternatively, if you have a fuel card for example, you could repay personal miles at a defined rate. Or in the past I charged back (or paid for) miles pro rata based on my actual expenditure on fuel. I am fairly sure they cannot force you to pay tax on a benefit you don't want, and which is so blatantly unfair. The level of this tax is such that the tax charged is actually higher than the value of the benefit to many people (me included). I would need to do about 12000 private miles a year to justify the tax (not the benefit, the TAX)
Check this

http://cccfcalculator.inlandrevenue.gov.uk/CCF 0.aspx

out to calculate your tax liability but I estimate it to be about �3,500 pa so if you pay tax at 22% that will cost you about �760 pa or �1,400 if you pay 40%. So at say 10p/mile, that would represent 7,600 or 14,000 private miles.

[imd123]

Thanks BenDToy

Just got round to visiting tax office and they were no use at all. Didn't even know the rules. I will now ask my company if I can just pay private mileage.

Tax is �3456.00 @ 40% and I only put about �50.00 per week in for private and business use. Like you I hardly use it privately and know exactly what you mean.