An employee uses their own car. As part of calculating their salary is an element for "oh, and we acknowlegde you will be using your own car so....". This is subjected to tax and NIC simply as part of the salary.
The company also provides a company fuel card to the employee. The employee is NOT required to repay any private fuel. Will the employee be subject to the calculated fuel benefit in full on their own vehicles CO2 etc rating OR will the private fuel cost be deemed an expense paid by the company for the employee and it subject to tax and NIC as "additional salary".
Is the situation different is the employee submitts, and is reimbursed for, all his fuel receipts to the company rather than charging all the fuel to a company fuel card?
My reasons for asking is that much of the text on these subjects are either that :-
a) fuel benefit is often spoke of on the assumption its paid for a company car, and
b) explaining the management where there might be a difference between an expense directly contracted by the company and/or an expense reimbursement.
The question has arisen as a new "business mileage" scheme is being discuss and certain employees are stating that historically part of their (verbal) contract was that the company would give them a fuel card to get back and to from home to work.
Replies (3)
Please login or register to join the discussion.
You've potentially got a bit of both
First important point to make is that you can't get a fuel scale charge without first having a car benefit charge (unless the amount of the car benefit is nil).
The fuel card is a credit token and (absent a company car to which it can be related) all amounts are reportable on the P11D. Employee would then have to claim mileage relief for business miles.
Any payment to the employee for private mileage (including commuting) is taxable/NICable through payroll, as is any flat-rate payment included in/paid with salary.
Apparently not
I'd not previously considered the point of a fuel card without a company car, but since it can only be used to purchase fuel, it's not "money's worth", and so isn't S.62 earnings.
However, looking at the P11D, it should go in box C which isn't subject to Class 1A.
So, looking at CWG2 (pages 85/86) it seems you should NIC (but not PAYE) the amounts at the date you decide to not seek reimbursement.
Don't forget the VAT aspects; either:
don't recover input VAT in respect of private mileage.account for a VAT fuel scale charge.
I can confirm the first point, that you don't have a fuel BIK, other than on a company car.