Company car fuel benefit

janner_10 · World Chat Champion Joined: 26 Sep 2011 Karma :

Just been offered a job with fully expensed company car.

The bit that concerns me is the fully expensed bit, I assume this includes a fuel card. Now living only 9 miles from work, this would seem a daft choice to take, around £950 per year tax. Personal mileage wont be anywhere near that.

Whats the best way to dodge this tax?

Turn down the card and just claim business miles through expenses, im thinking is the least hassle route.

Anyone else done similar?
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Bozzy · Traffic Copper Joined: 20 Dec 2015 Karma :

I have a company car. I pay for all the personal fuel I use meaning I don't pay tax on that "benefit". It's only if you have free fuel for personal use you are taxed on it. Any business miles I do I claim back in my wage. Not sure exactly but I think it's about 12p a mile.

Itchy · Super Spammer Joined: 07 Apr 2005 Karma :

Claim business miles at 45p a mile. If you get paid less than this per mile then you can claim the difference.

It doesn't reduce your tax by 45p.

Instead each mile reduces your taxable income by 45p. It's been a while since I've been involved in UK tax.

So if you make say £40,000 you'd pay £9,632.80

But add in 1000 business miles @ 45p and you'll pony up £9,488.80 tax instead saving 144 quid in taxes.
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herulach · World Chat Champion Joined: 19 Apr 2010 Karma :

FriendlyEllis · Spanner Monkey Joined: 28 Dec 2012 Karma :

stevo as b4 · World Chat Champion Joined: 17 Jul 2003 Karma :

If you travel to meetings in different city's and locations, I'd ask for a rail season ticket instead of a car if this is practical.

janner_10 · World Chat Champion Joined: 26 Sep 2011 Karma :

Its a Merc C220d Sport BlueTEC, according to HMRC will cost me £98 per month in tax.

My current car is a '06 Saab 95 Aero, which after 140k miles, is ageing to say the least. It costs £25 per month in tax plus £20 a month insurance, so I can stomach the extra £50 a month in tax (new job is £6k more per year)

I just don't want to be stung for the £1k per year tax for a fuel card when I dont really need it.

An hour of Googling suggests turning down the fuel card and claiming back the business mileage.
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janner_10 · World Chat Champion Joined: 26 Sep 2011 Karma :

herulach · World Chat Champion Joined: 19 Apr 2010 Karma :

Christoffee · Nitrous Nuisance Joined: 20 Aug 2013 Karma :

Lots of good advice here.

Generally, company cars are not economical. Let's say your company car is taxed at 25% of list price. Over four years you've had enough "income" to pay for a band new car. Except you haven't got a brand new car. And list price is excessive. And the % you pay on your car goes up each year.

In my experience, depending on what the employer is offering by way of a cash alternative, you are better off buying your own car and claiming the 45p. Again, depending on business and personal miles, your results may vary.

People that still like company cars are the sales guys piling on the miles or with low job security that bounce around jobs (they don't like the thought of paying for a car if they'll be unemployed for a couple of months).
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