Tax on company petrol card for private car.

scope

Assuming you are on 40% tax bracket, how much would I have to pay tax on petrol when the company gives me petrol card for private car? I understand its 40% of price/litre, but VAT (anything else?) is taken off the amount first. So assuming the petrol is 90p/litre, how much tax per litre? How much/what is taken off the price?

Thanks.

Hoddie_2

The taxable value is the actual value of the petrol you buy using the card. It's effectively just extra salary so you'd be taxed at 40% on every £ spent on the card.

scope

OK, I've heard you take off the VAT charged, or something like that... But like anything else from the government it is impossible to find the correct document.. and if you do its impossible to understand it.

Hoddie_2

I'm fairly sure you don't take off the VAT. If you paid for the fuel yourself, you'd have the VAT to pay, and as it's treated as extra salary you'd be taxed on the full amount. I don't think there's a difference if you use the fuel card or the company gives you money to pay for the fuel. However, I might be wrong because it's not something I've ever looked into in great detail. If you find out, please post back here - it might help someone in the future.

jennifernil

You will pay tax on the full cost of any private petrol your employer pays for.
I don't know where you got any other idea from!

nej

VAT stays on. You pay 22% or 40% of what you used for personal use. So business mileage is deducted, then you pay 22% or 40% on what's left. It's treated as extra salary.

This is very different if you have a company car, where you pay through the nose for it.

scope

nej wrote:

VAT stays on. You pay 22% or 40% of what you used for personal use. So business mileage is deducted, then you pay 22% or 40% on what's left. It's treated as extra salary.

This is very different if you have a company car, where you pay through the nose for it.

OK, thanks. I would end up paying for both private and business and claim back 40p/mile for business miles.

I have had a company car for the past 7 years, but decided to get my own car now and get car allowance instead.. All being well, and nothing major needing fixing I should be a fair bit better off.

jennifernil

I'm confused now. Is your employer paying for all your petrol? And you are being taxed on this full amount? For business miles you can claim tax relief on 40p per mile up to 10000 miles. Not the whole 40p.

Hoddie_2

scope wrote:

OK, thanks. I would end up paying for both private and business and claim back 40p/mile for business miles.

I have had a company car for the past 7 years, but decided to get my own car now and get car allowance instead.. All being well, and nothing major needing fixing I should be a fair bit better off.

If your employer gives you a fuel card and you use this to pay for both private and business fuel, you will be taxed on the full amount that is spent, and be expected to submit an annual expenses claim to HM Revenue & Customs to reclaim the tax on the 40p/25p-per-business mile. If you did approx. 6,000 business miles or more, your expenses claim would be such that you'd likely have to complete a Self Assessment tax return each year.

scope

jennifernil wrote:

I'm confused now. Is your employer paying for all your petrol? And you are being taxed on this full amount? For business miles you can claim tax relief on 40p per mile up to 10000 miles. Not the whole 40p.

Yes, they pay for all the petrol, private and business.. I will be taxed on the whole amount, and will claim 40/25p per mile for any business miles I do.

spoonz

i opted out of the fuel card.

I now claim 12p per mile expenses for business and then tax relief on the 28p difference. Works out better for me that way as I do little mileage.