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Fuel Benefit

Hi

A person has a company car for a few years and reimburses his employer for all private mileage.

During the 2011/12 tax year, he decides to stop reimbursing his employer and suffer tax on fuel benefit instead.

The new arrangement starts on 1 July 2011. 

My question is, can the fuel benefit be pro rated to take account of the period he was still reimbursing his employer?  There is no box on the P11D to state when fuel benefit starts, and the software I am using to create the P11D will not let me enter a date in the "fuel benefit started" box unless the car benefit starts on the same date!

Am I missing something?

Thanks

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26th Apr 2012 15:58

No!

I don't believe it can be pro rated in these circumstances.  If he has started the year with the fuel benefit and the benefit had been withdrawn it could then be pro rated.  But this way round he suffers the fuel benefit for the full tax year.

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26th Apr 2012 16:17

Fuel benefit catch

Cathy is right, I'm afraid.

The catch lies in ITEPA 2003, s. 152(3). This says that any reduction that would have been given is disregarded if there is a time later in the tax year when private fuel is provided.

There are almost no circumstances at all in which it makes good tax sense to suffer the fuel benefit charge, if you work the figures through. If he realises that the new arrangement was a mistake, the sooner he stops it the better and, this way round, he will obtain a proportionate reduction for the current tax year.

 

 

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27th Apr 2012 08:36

Thank you very much!  I had a

Thank you very much!  I had a feeling this may be the case.  It seems a little unfair, but rules are rules!

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