Company Car - Fuel Card or Claim mileage back??

sherlockuk

HI All,

I have been looking for an answer but could not find anything that necessarily fitted with my query, so here I go!

I have a 2.2 Diesel Mazda 6 as a company car which was offered to me at the start of my employment, I tried before hand to work out if it would be better for me to take the allowance (£4500) or the car, I eventually opted for the car. Now the mileage rate Is 14 pence per mile, from many months of recording my fuel useage it is actually 11 pence that I spend. Can I claim that back in any way from the HMRC via self assessment?

The P11D value is £20,765 and the CO2 emissions are 147 g/km.

The other option would be to ditch the fuel card and go over to paying for the fuel myself and claiming business mileage back off the company, would this be a better option? I do about 110 miles per day to and from work + weekend miles, so this extra 4 pence per mile is costing me a considerable amount. Any advice is appreciated.

Thanks.

ukjoel

Didnt answer earlier as not really an expert in this issue but have done several jobs and tried both systems at more than one company.

I always found I was financially better off claiming the miles than using a fuel card. The fuel cards are designed for the benefit of the petrol stations, the leasing companies (which get a cut of any spend) and the employer who supposedly saves money and has less admin to do.

As you have realise financially your are being paid a higher rate per mile than your actual cost. This is because when these are set they take into account all sorts of vehicles, and also average petrol prices (not the cheapest you can find which you use if paying yourself).

From memory the taxman only cares if your mileage rate is over X pence a mile as this could be a sly way of paying extra to employees tax free. From memory this was much higher than 14p so I wouldnt worry.

making 4p a mile doesnt sound like a lot but if you do 50k company miles a year that adds up to 2k a year. I have known people to be making as much as 7 or 8k a year from this perk quite legitimately by driving small diesel fiestas long distances when the company milage rate was based on 2 litre mondeos. Not the most comfortable way to travel but paid for several holidays every year as compensation.

jimmo

I think I get it. Can you confirm my interpretation?
You have a company car with a fuel card. Your employer therefore pays the actual cost of all fuel but charges you 14 pence per mile for any private mileage.
Your own calculations show that the car's actual performance equates to 11 pence per mile and you therefore believe that your employer is overcharging you 3 (not 4) pence per mile for your private use.
Can you claim Tax relief on that?
No, the costs you are incurring are not for business travel, they are for private travel and the taxman is simply not interested.
If I have got this right there are no tax consequences to you using a fuel card.
If you ditch the fuel card then you will pay the actual cost of all fuel and your employer will reimburse you for your business mileage.
If your employer will pay you 14 pence per mile for business mileage then, not only will you stop overpaying 3 pence per mile for your private travel but you will start making 3 pence per mile from your business travel.
Still there are no tax consequences because the mileage rates used are within the HMRC approved rates.
Incidentally the approved mileage rate increased from 14p to 16p in June.
http://www.hmrc.gov.uk/cars/advisory_fuel_current.htm
There is a link to the previous rates there.

Geeman18

sherlockuk wrote: »

HI All,

I have been looking for an answer but could not find anything that necessarily fitted with my query, so here I go!

I have a 2.2 Diesel Mazda 6 as a company car which was offered to me at the start of my employment, I tried before hand to work out if it would be better for me to take the allowance (£4500) or the car, I eventually opted for the car. Now the mileage rate Is 14 pence per mile, from many months of recording my fuel useage it is actually 11 pence that I spend. Can I claim that back in any way from the HMRC via self assessment?

The P11D value is £20,765 and the CO2 emissions are 147 g/km.

The other option would be to ditch the fuel card and go over to paying for the fuel myself and claiming business mileage back off the company, would this be a better option? I do about 110 miles per day to and from work + weekend miles, so this extra 4 pence per mile is costing me a considerable amount. Any advice is appreciated.

Thanks.

If all the fuel card costs are paid by your employer, then your taxable benefit is as follows:

£16,900 x 20% = £3,380

Add to this the taxable benfit of the car (£20,765 x 20% = £4,153), your total taxable benefit for the car is £7,533. This is obvoiusly much higher then the car allowance, but I would take into consideration the fact that you would have to pay for your fuel.

Mileage to and from your main place of work is considered private use, so is not allowable, or if it was reimbursed would be taxable.