Tax liabilities of company provided fuel card

richandria

Hi, my employer provides me with a fuel card to purchase all my fuel for a privately owned car. I do no reimburse the company for any private miles I do. As far as I am aware I am liable to pay tax (40% as I'm a higher rate PAYE employee) on the total amount of fuel purchased on the card in the tax year. Is this right? I cannot find the information on the gov website to explain this. And when I ring HMRC up the advisors don't seem to know either....
Also, as I understand it, I am able to reduce the tax liabilities of the fuel card by claiming 45p/mile for all business miles (first 10,000 miles anyway) and 25p/mile after that. How is this claimed? Is this reported on my P11d at the end of the year - there doesn't appear to be a box for that based on last years P11d. I will be claiming for 21/22 tax year as private vehicle was only available from Jun 21 onwards.
Thanks for any help provided.

Grumpy_chap

richandria said:

Hi, my employer provides me with a fuel card to purchase all my fuel for a privately owned car. I do no reimburse the company for any private miles I do. As far as I am aware I am liable to pay tax (40% as I'm a higher rate PAYE employee) on the total amount of fuel purchased on the card in the tax year. Is this right? I cannot find the information on the gov website to explain this. And when I ring HMRC up the advisors don't seem to know either....
Also, as I understand it, I am able to reduce the tax liabilities of the fuel card by claiming 45p/mile for all business miles (first 10,000 miles anyway) and 25p/mile after that. How is this claimed? Is this reported on my P11d at the end of the year - there doesn't appear to be a box for that based on last years P11d. I will be claiming for 21/22 tax year as private vehicle was only available from Jun 21 onwards.
Thanks for any help provided.

Yes, fuel card for your own car is taxed at your marginal rate on the actual cost of fuel purchased.

You can then claim mileage relief at 45 ppm / 25 ppm for business miles through your tax return.  Assume that you did not receive a separate mileage payment from the employer.

richandria

Grumpy_chap said:

richandria said:

Hi, my employer provides me with a fuel card to purchase all my fuel for a privately owned car. I do no reimburse the company for any private miles I do. As far as I am aware I am liable to pay tax (40% as I'm a higher rate PAYE employee) on the total amount of fuel purchased on the card in the tax year. Is this right? I cannot find the information on the gov website to explain this. And when I ring HMRC up the advisors don't seem to know either....
Also, as I understand it, I am able to reduce the tax liabilities of the fuel card by claiming 45p/mile for all business miles (first 10,000 miles anyway) and 25p/mile after that. How is this claimed? Is this reported on my P11d at the end of the year - there doesn't appear to be a box for that based on last years P11d. I will be claiming for 21/22 tax year as private vehicle was only available from Jun 21 onwards.
Thanks for any help provided.

Yes, fuel card for your own car is taxed at your marginal rate on the actual cost of fuel purchased.

You can then claim mileage relief at 45 ppm / 25 ppm for business miles through your tax return.  Assume that you did not receive a separate mileage payment from the employer.

Thanks for the info. Backs up my understanding. Do you know where this is stated? Just so I can reference something if I have to speak with HMRC again…

Grumpy_chap

You will find it in here: https://www.gov.uk/hmrc-internal-manuals/employment-income-manual
Sorry, I did previously know exactly where, but not kept up.

I did what you propose for a long time.

KingOfSnake

Totally agree. The full value of fuel (VAT inclusive) is included on your P11D. You then claim 45ppm (first 10,000 business miles, 25ppm thereafter and 5ppm passenger rate) 'against' the P11D value. If your mileage x Approved Mileage Rates ("AMR") exceeds the P11D value you'll get a refund (NB! depends on your other circumstances, but if the figure is negative that is refund). Either way, it is a really great benefit as you're only effectively paying 40% of pump price. 

richandria

Think I found the relevant page on the gov website. Go round in circles on there though!

employment-income-manual/eim31235

Step 1 - this would be the total amount of fuel purchased on the fuel card
Step 2 - this is the relief for any business miles carried out during the tax year

So as an example I currently average £100 spend on fuel a month, thus £1200/year and lets say I do 500 business miles in the tax year I can deduct 500 x 0.45 = £225 off the total fuel cost. Therefore the amount reported on the P11d = 1200 - 225 = £975 and I pay tax on this figure?

Dazed_and_C0nfused

Could be wrong but I doubt this would have any bearing on the amount reported on the P11D, using your example that would show a taxable amount of £1,200.

You would make a separate (P87) claim for any expenses.  Or include the claim (and P11D benefit) on your Self Assessment return if you need to complete one.

Dead_keen

Dazed_and_C0nfused said:

Could be wrong but I doubt this would have any bearing on the amount reported on the P11D, using your example that would show a taxable amount of £1,200.

If the employer is switched on, they would show the net amount (fuel reimbursed less AMAPs) as it saves them class 1A NIC.  What any particular employer does will be based on what how they document the free fuel and this is obviously an open question here.

Out of interest, HMRC's guidance mentions this here: https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim25530

Bigphil1474

OP, you need to keep a detailed record of your work mileage, as any other mileage you do will be personal. As above, you basically have a tax free allowance for work mileage of the 45p a mile (up to 10k miles), so as long as the cost of fuel divided by 45p a mile is the same or less than your mileage x45p, then you won't be paying tax on it. How your employer organises it will make it easy or a pain. As above, probably easier for them to deduct your work mileage allowance from the fuel payment first, rather than you having to claim it back.