Budget 2008: Tax relief for van drivers and benefits for going green

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Company van drivers will not be taxed on fuel reimbursements under a new law being introduced in the finance bill.

The rule affects employees who have a company van for private use but purchase fuel for business travel that is paid for by employers, as well as employers who bear class 1A National Insurance on the taxable benefit of providing both the vehicle and fuel.

It falls in line with the provisions for company car use and will take effect when this year's finance bill receives royal ascent.

The chancellor also announced the reform of car vehicle exercise duty (VED) and write-down allowances with benefits for corporate car owners.

On top of a delay until October of the expected increase of two pence per litre to fuel duty rates, other news for companies was that government will further pr...

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12th Mar 2008 18:09

This change is for private fuel only
The new 'exemption' relates solely to fuel for *private* use in a company van. Fuel for business use is already covered by the business expenses rules.

It's a technical point to avoid a double tax charge:- without it, the reimbursement of the cost of fuel purchased for private use would still be a benefit, in addition to the £500 private fuel scale charge now levied on company van drivers. It merely repeats for vans what the rules have done for company cars for many years, so that the scale charge covers all costs..

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