Fuel card but not company car

Doughmaker

Any help appreciated..
I have recently got a new job.
As part of my package I have a £6000 Car allowance and also a fuel card which can be used for business and personal miles.
I assume I just buy whatever car I fancy and the £6000 will be added to my top line salary each month and taxed at my marginal tax rate.
However I am not sure how my fuel card will be taxed.
I have had a fuel card before but that was with a company car and I am familiar with the tax setup in that circumstance.

Does anyone know how I will be taxed in my new circumstance?
Does it matter what car I drive? eg CO2 % etc??


Thanks in advance..

withabix

Your P11D will show the value of ALL of the fuel purchased on your fuel card.

You will be taxed on this value.

You then need to claim tax relief on genuine business mileage. (Travel between home and office base is not business mileage)

First 10,000 miles per year is tax relief on 45p/mile.
Remainder is relief on 25p/mile.

Some employers now do this calculation through the payroll system, as it saves them some employer's NI. Mine started doing that this year.
Type of car and CO2 don't come in to it.

For cars, try a nearly-new one at Motorpoint. That's where I get mine from.

What your employer allows you to drive (CO2/engine/fuel/age/doors/seats/convertible/sports etc) will be in your Contract. Some employers have restrictions.

thenudeone

Why did you state that the value of the fuel card will appear on your payslip?

Do you have to pay for the fuel first, then the company pays the full amount to you on your payslip?

If so (although it's an unusual way of doing it) you can ignore the usual tax rules rules for fuel cards, because the company isn't giving you free fuel at all - you are paying for it in full yourself.

The amount appearing on your pay slip is just taxed in full as your salary.

You then put claim the business mileage allowance (as explained above) when completing your tax return.

Doughmaker

I did not say anything about the value of my fuel being on my payslip.
I dont think I will be paying for fuel - will just be using fuel card.
My query was how will I be taxed for the use of this fuel card.

thenudeone

Doughmaker wrote: »

I did not say anything about the value of my fuel being on my payslip.

Sorry - When I re-read your post I realise the £6000 is the car allowance. You're almost correct - This will be taxed in just the same way as your salary (so it could push you into a higher tax bracket than before, so it's not necessarily your marginal rate).

If the company are paying the fuel card bill, I'm pretty sure that because it's not linked to a company car, it's not taxed like free fuel for a company car is (i.e. at a fixed rate regardless of how much fuel is actually supplied). Instead, the value of the fuel they pay for in the tax year will appear on your P11D as a taxable benefit and HMRC will issue an assessment or ask for a tax return. In either case, you will pay tax on that value in full.

Which is why you need to calculate your business miles and claim the allowance from HMRC for all of your business miles. You will need to keep a log of business and personal mileage with full details (dates, mileage, customers / suppliers visited) to justify your claim, which is likely to be well into four figures.

But - your personnel or wages dept. will know exactly how it's dealt with, because they complete P11Ds each year. So I suggest you ask them.