Fuel tax and BIK tax

JAMason

I've never had a fule card and need a bit of help understanding it. 

Work provides me with a company car, and I understand how the P11D and BIK tax works for that car and see that reflected in my TAX code. 

I've now got a fuel card as I've changed roles with the business and I'll be doing a heck of a lot more miles. Work have told me I'll now see about £135 a month deducted from my salary for fuel and around June/July time I'll get a rebate/bill if my personal mileage is lower/higher than anticipated? 

I log the miles on the traxmiles app and ALL my mileage in the car is business. My office is home so there is no commute to the office and all my travel in the car is for business use between their various sites. I have my own car for personal use. 

Will I get a rebate for the full £135 a month or not if I make sure I only ever use the car for business? 

Grumpy_chap

I am not sure what is referred to by the £135 per month, unless that is the calculation of tax for your car having the fuel card as well.  Maybe as your employer where that £135 comes from.

The BIK for a fuel card is the percent charge for the CO2 rating for the company car (2021 = 1% to 37%) x £23,400 x your marginal tax rate (20% or 40% in most cases).

Hope that helps

JAMason

Grumpy_chap said:

I am not sure what is referred to by the £135 per month, unless that is the calculation of tax for your car having the fuel card as well.  Maybe as your employer where that £135 comes from.

The BIK for a fuel card is the percent charge for the CO2 rating for the company car (2021 = 1% to 37%) x £23,400 x your marginal tax rate (20% or 40% in most cases).

Hope that helps

Thanks for the reply. So I've looked at the spreadsheet I was sent for the choice of cars I've got from work, this is what the sheet is reading for the car I've picked. 

Cars Retail price: £22,910.00
BIK 2021/2022: 30% = £6,873.00 (deducted from my personal tax free allowance)
BIK per annum: £1,374.60 (£114.55pcm)
Petrol card: £135.75 pcm

Total: £250.30 pcm

I'm a 20% tax payer. 

I guess my issue is, I'm not using the car for personal use so how much, If any, of the £135.75 will I get back if I keep it at zero personal miles? And am I better off using the car for personal stuff if I'm just going to get taxed on the patrol anyway and not get all/much of the petrol money back later down the line?! 

Grumpy_chap

There is a criteria whereby, if an employee is not allowed (by the employer) to use the car for personal mileage, then the BIK can be avoided.  This is a strictly interpreted criteria and rarely met.

You have to assume that you will not get any of the £135 back, but it is worth asking how that number was worked out?  
Using the 30% x £23,400 x 20% comes to £1,404 = £117 per month.
If you were HR, then the £117 would be £234.
Does the BIK on the fuel card take you across into the next bracket, so part at 20% and part at 40%?  

JAMason

Right, I've worked it out with your help @Grumpy_chap! 

The £135 is based on my current car. That is 33% x £24,600 (2021/2022 tax year) x 20% = 1623.60 per annum or £135.30pcm 

My current car is more expensive and in a higher BIK tax band. 

So with my new car being a lower BIK band at 30% it'll also bring my petrol down to £117 pcm you worked out. 

Still doesn't answer the question of a rebate for zero personal miles though! 😂 haha. I guess that is a question for accounts at work. 

Cheers. 

Grumpy_chap

JAMason said:

Still doesn't answer the question of a rebate for zero personal miles though! 😂 haha. I guess that is a question for accounts at work. 

It won't happen.  As I stated above:

Grumpy_chap said:

There is a criteria whereby, if an employee is not allowed (by the employer) to use the car for personal mileage, then the BIK can be avoided.  This is a strictly interpreted criteria and rarely met. 

No benefit to the employer for that and the employer is responsible for enforcing compliance.

You get the car, you get the fuel card and you pay the tax.  Your opportunity to make the most of it to maximise the personal use of the car.