Refund of tax for company car fuel benefit

Jennabob

Hello
I currently have a company car and fuel card which is used also for private mileage.

My fuel benefit is £1029 for the tax year 2020/2021.

As I have been working from home for most of the year my company are allowing me to temporarily give up the fuel card for this tax year.  

I will pay them back for the personal fuel used and they will then inform HMRC that I had no fuel card for this tax year when they submit my P11D.

Given I have already paid the deductions for this over the tax year, I should receive this £1029 back from HMRC.

My question is how this money will be refunded?  I have called HMRC twice and got 2 different answers.  One said my tax code for 2021/2022 would be adjusted and another said it would be a lump sum payment.

Does anyone know which it will be?

Thank you.

Dazed_and_C0nfused

Jennabob said:

Hello
I currently have a company car and fuel card which is used also for private mileage.

My fuel benefit is £1029 for the tax year 2020/2021.

As I have been working from home for most of the year my company are allowing me to temporarily give up the fuel card for this tax year.  

I will pay them back for the personal fuel used and they will then inform HMRC that I had no fuel card for this tax year when they submit my P11D.

Given I have already paid the deductions for this over the tax year, I should receive this £1029 back from HMRC.

My question is how this money will be refunded?  I have called HMRC twice and got 2 different answers.  One said my tax code for 2021/2022 would be adjusted and another said it would be a lump sum payment.

Does anyone know which it will be?

Thank you.

Sorry to disappoint but you won't be getting £1,029 back.

Any refund would normally be c£205 or £410 but could be as low as £0 or as high as £615 in exceptional circumstances.

Assuming your tax affairs are upto date you will get a calculation showing the tax overpaid later this year (between June and October normally) and be invited to transfer the money to your bank account via your Personal Tax Account.

If things are more complicated i.e. you owe tax (for any reason) which is going to be collected via your 2021:22 tax code then it may result in an adjustment to your 2021:22 tax code instead.  And you would get the benefit of a higher tax code throughout the 2021:22 tax year.

Jennabob

Hi

Thank you for the reply.  Can you advise why I wouldnt get the full amount paid?  

My HR department have advised that I should get the overpayment back, as essentially I have been taxed for having a fuel card but have not used it.  Therefore the £1029 in tax that I have paid for this unused benefit should surely be refunded?

[Deleted User]

Jennabob said:

Hi

Thank you for the reply.  Can you advise why I wouldnt get the full amount paid?  

My HR department have advised that I should get the overpayment back, as essentially I have been taxed for having a fuel card but have not used it.  Therefore the £1029 in tax that I have paid for this unused benefit should surely be refunded?

You have said that your fuel benefit was 1029. That means that you paid additional tax on £1029 at 20% or 40%. You did not pay £1029 in additional tax.

Dazed_and_C0nfused

In your original post you said you had a fuel benefit of £1029.

Now you are saying you have paid an extra £1029 in tax.

Both cannot be correct.  Which is it?  

Jennabob

Apologies, i think I may have wrote this incorrectly.  The car fuel benefit charge is £5145 and the cash equivalent is £1029

[Deleted User]

Jennabob said:

Apologies, i think I may have wrote this incorrectly.  The car fuel benefit charge is £5145 and the cash equivalent is £1029

I think you mean that the tax on £5145 is £1029. The cash equivalent of £5145 fuel benefit is £5145 i.e. what effect does that benefit have on your income?

That now makes a lot more sense.

Dazed_and_C0nfused

I presume the cash equivalent figure is the tax you expect to pay on the benefit of £5,145.

If so and that is correct (no one can be 100% certain until the tax year ends as company benefits are just another source of income, they don't get taxed at a fixed 20% or 40% just because they are a company benefit) then yes you would get the whole lot back once the P11D from your employer is dealt with by HMRC.  Subject to any tax you owe for any other reason.

Employers have until early July I think to file P11D's so it will likely be summer before you hear anything.

Have you had a tax code for 2021:22 yet?  If that includes fuel benefit and the 2020:21 P11D reports the benefit as nil then you will probably get a revised code for 2021:22 first, removing the fuel benefit for 2021:22.

Then the refund for 2020:21 will follow.

Jennabob

Thank you, yes that is what is stated from my company as being the tax on the £5145.
I've not had my 2021/22 code as yet, but will make sure it all tallies (as best it can) when I do.