Company Car & Fuel Tax Benefit tax

Company Car & Fuel Tax Benefit tax

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I work in a small company and the directors have assigned company cars and fuel cards to certain employees.   I am new to all of this and would like some help as to what I should do with regards to taxing these employees.

I know I have to fill in P46 car for each employee to notify the HMRC.   I also have set up a spreadsheet with the list price and CO2 emissions for each of the cars and have used the hmrc website tool for company car  & fuel tax benefit calculations to calculate an approximate figure that the employees would have to pay each month.

As far as I can see, the employees with company cars have two options

1.To be taxed on company car and all fuel

2. To be taxed on company car only and pay for all fuel and complete a monthly mileage report and pay for any personal mileage

The employees who use their own cars only can claim the business mileage for first 10,000 miles @ £0.45 per mile and £0.25 for any mileage over 10,000.

There is also one employee who uses his own car and has been issued with a fuel card, unsure how this works !!

I just need some clarification that I am on the right track !  Any help would be great as I have tried to call HMRC about 20 times today.

Elaine

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By Steve Kesby
13th Apr 2012 11:58

You are on the right track

Where employees with a company car (of which there is private use) are provided with a fuel card, then there will be a fuel benefi in addition to the car benefit unless they are required to and actually do make good the cost of the private fuel.

In order to do so, mileage records need to be maintained and the employees need to have reimbursed the employer with the cost of the private fuel by the time the P11Ds are prepared and submitted to HMRC.

HMRC do find it acceptable for reimbursements to be made at their Advisory Fuel Rates, rather than actuals, although you might find actuals (if anyone can be bothered to maintain the necessary records to and actually calculate them) are lower.

Where an employee without a company car is provided with a fuel card, that is a credit token and the total amount spent on the card should be reported as a benefit.  The employee can then make an expense claim for their business mileage, or better a claim for Mileage Allowance Relief.

In this latter situation, the employer might want to pay an amount for business mileage representing the difference between the AMAP and Advisory rates, to put them on the same footing as the other employees using their own cars.

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By Swedish Chef
12th Apr 2012 10:46

And don't forget.......

... to complete forms P11D at the end of the tax year.  Due for filing by 6th July, with any Class 1A NIC payable by 19th July.

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