SEARCH, INDEX, UPDATES, CONTENTS, INFORMATION, CAR FUEL BENEFIT FROM 2003/04
For several years the tax payable on fuel provided for private use of a company car has been increasing significantly, so that it is only beneficial for a small percentage of employees who do very high private mileages.
The whole position should be reconsidered because the method of calculating the Fuel Benefit changed from 6 April 2003. Some employees gained significantly and others lost significantly.
From 6 April 2003, the Car Fuel Benefit is linked directly to the CO2 emissions of the company car. The same percentage figure will be used as for the Company Car Benefit - see Car Policy.
The first change is that the percentage figure will be multiplied against a set figure for the year. For 2003/04 the set figure will be £14,400. The taxable benefit will range from £2,160 (£14,400 at 15%) to £5,040 (£14,400 at 35%), assessed at 22% or 40% as appropriate, plus the Class 1A National Insurance Contribution.
The second change is to apportion the benefit where free fuel ceases to be provided during the year, however receiving free fuel later in the same tax year will prevent the apportionment. Previously any fuel supplied (including that on delivery of a new car) gave rise to an assessment to the full year benefit.
See also -
Additional Passenger Rate - a new
tax free payment from 6 April 2002.
Mileage Rates (Fuel Only) - new advisory
figures for 2002.
Mileage Rates (RAMR) - Revenue Authorised Mileage Rates
for employee owned cars.
Mileage Record - print this
handy form to record your business mileage
VAT in Mileage Allowances - can be
reclaimed by some VAT registered businesses.
Business Cars - the rules on tax relief
Car Policy - is a company or firms car and fuel
worthwhile?
Travel and Subsistence - new rules on
commuting since 6 April 1998 - are you complying?
Reminder - disclaimer applies. Please feedback your comments. This page was last modified 26 July 2003.