Fuel card tax calculation

Fuel card tax calculation

Didn't find your answer?

I am aware that the BIK for the provsion of a fuel card is based on £14400 multiplied by the relevant emmissions percentage of the company car.

However, what i am struggling to establish is how the BIK is calcualted where no company car is provided? Is this based on the emmisions of the employees personal vehicle? Or is it calculated in some other way?

Thanks
Nureyev

Replies (8)

Please login or register to join the discussion.

avatar
By AnonymousUser
25th Oct 2006 09:02

I believe this comes under the credit token rules, S94 ITEPA
so it comes back to a mileage log to determine the benefit.

Thanks (0)
avatar
By User deleted
25th Oct 2006 10:15

?
Neil, you seem to be saying the same as me apart from you say the business mileage figure is not relevant. Surely it is as it is this figure you would multiply by the 40p to get the allowance.

Apologies if I have misunderstood you.

Kay

Thanks (0)
avatar
By Peter Cane
24th Oct 2006 17:22

Mileage log
If employee(s) are using their own car for business purposes, they should be keeping a detailed log of their business mileage.

They are only entitled to claim under the Revenue Approved Mileage Rates, ie the first 10,000 miles @ 40p per mile, 25p thereafter.

Any excess claimed above the Revenue rates should go through the payroll and be subject to Income Tax and Class 1 NI. If no mileage logs are being kept, then the whole lot is taxable and NI'able.

Thanks (0)
avatar
By User deleted
24th Oct 2006 18:29

Yeah but........
the Revenue aproved mileage rates of 40p/10p apply when an employee uses their own car and fuel for business journeys. In this case, the employee uses his own car but is also issued with a company fuel card which he uses to purchase both business and personal fuel.

My question was more about how we work out the BIK on the supplied fuel card? If as has been suggested, I used the total of the fuel card bills, i would surely be pulling in fuel that was used for legitimate business purposes!

Any further suggestions?

Thanks

Thanks (0)
avatar
By User deleted
24th Oct 2006 18:52

well I am wrong!
The way I have done this in he past is to get the total business miles, multiply by 40p then deduct the actual payments made. As petrol costs a lot less than 40p the employee was due a refund-as private mileage was very low.

The Revenue calculate that petrol costs 9p a mile. If an employee had a milegae rate of 9p a mile and supplied their own car, they would be entitled to a refund. What is the difference? The private element is already accounted for by deducting the fuel card payments made.

Thanks (0)
avatar
By neileg
25th Oct 2006 09:08

Rethink
There are two issues here, not one. The first is the fuel card and the second is the use of a private car for business use .

The provision of fuel gives rise to a benefit which should be subject to PAYE. The use of the car for business gives rise to an allowance. Now assuming that the employee gets no other payment from the employer, the 40p per mile may be deducted to reduce the benefit arising on the fuel. It is immaterial how much of the fuel is for business, you are simply offsetting the allowance against the benefit.

If the net position is an excess of allowances, the employee can claim this on his SATR. If the net position is a residula benefit, the employer should subject this to PAYE.

Thanks (0)
avatar
By ACDWebb
24th Oct 2006 17:37

It is based on
the actual amount paid on the credit card, not the flat rate sum on £14,400. That only applies where there is a company car

Thanks (0)
avatar
By neileg
25th Oct 2006 10:44

Kay
Sorry for not being clearer.

What I was saying is that the value of fuel used for business is not part of the calculation. You take the full value of the fuel and subtract the value of the mileage allowance (business miles @ 40p) to get a net position. This is pretty much the same as you said.

Thanks (0)