Fuel Card Taxation Query

Dickyt

Hi. Hopefully I have posted this in the right place.

I have had a company fuel card with my own car for a number of years and so am familiar with how the fuel card is taxed i.e. the total fuel cost is a benefit in kind and I can claim tax relief at 40p / 25p per business mile.

Due to my high business mileage this normally means the tax man owes me £1,500-£2,000 each year.

I have recently changed jobs and will continue to run my own car. My new employer is claiming they have reached a company wide agreement with HMRC regarding the taxation of the fuel cards they issue - they charge the employee an amount equivalent to the tax that would be due for the fuel card if it was used in conjuction with a company car (so therefore an amount that is irrelevant to someone running their own car) i.e. £16,900 x CO2%, and employees waive their rights to make any independent claim for tax relief.

If it is true I am not suprised HMRC have agreed to it, as it will be costing every employee in the same situation as me thousands of pounds!

Is my employer allowed to do this as it seemes completely unreasonable?

Please Help.

stratty

The agreement with the tax office is "they charge the employee an amount equivalent to the tax that would be due for the fuel card if it was used in conjunction with a company car"

You are using your own vehicle so I dont see why the agreement would apply.

amf

If what you say is correct, your employer is confused..........to use a euphamism! Any amount you make good reduces the expenses reportable on the P11D. You still can claim the statutory mileage rates (40p/25p) as you have previously done.

What you claim to have been told is so unbelievable. It sounds like an attempt to negate the fuel benefit for company car users. For reasons that don't need explaining here, it won't work.

cosyc

If you are running your own car why are they offering you a company fuel card?

There is a compnay car fuel per mile rate, are they talking about this not the cash value calculation?

Dickyt

Thanks for your thoughts.

Even though I have my own car (part funded by car allowance) they still provide a fuel card as a perk.

Since posting the query I have spoken with a couple of accountants and they have never come across anything like this before and they cant see how it can apply either.