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Fuel tax on company car

Is employer calculating it correctly?

My daughter has a company car, she does not have a fixed place of work and she travels to several different sites every day. She needs to record any private mileage and is charged by the company at the rate of around 10p per mile. Her private mileage is minimal. She has received her new tax coding notice for 2019-20 and there is a fuel tax charge of £5500. Can anyone shed any light on this for me?

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21st Mar 2019 21:18

Section 151 Income Tax (Earnings and Pensions) Act 2003

Car fuel: nil cash equivalent

(1) The cash equivalent of the benefit of the fuel is nil if condition A or B is met.

(2) Condition A is met if in the tax year in question—

(a) the employee is required to make good to the person providing the fuel the whole of the expense incurred by that person in connection with the provision of the fuel for the employee’s private use, and

(b) the employee does make good that expense.

(3) Condition B is met if in the tax year in question the fuel is made available only for business travel (see section 171(1)).

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21st Mar 2019 21:40

To follow up on condition A you need to check the Advisory Fuel Rates. If the payments to the employer are less than the specified rate for the car in question (and you can’t convince HMRC that the payments do in fact cover the cost of private fuel) a fuel benefit will arise.

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By suzy.81
22nd Mar 2019 14:04

Hi, Just because there is a fuel tax charge in the coding notice doesn't mean the employer has done anything differently. My partner has a company car and doesn't pay the fuel tax charge but HMRC had put it in the latest code. We had to call them to get it removed.

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to suzy.81
22nd Mar 2019 16:08

suzy.81 wrote:

Hi, Just because there is a fuel tax charge in the coding notice doesn't mean the employer has done anything differently. My partner has a company car and doesn't pay the fuel tax charge but HMRC had put it in the latest code. We had to call them to get it removed.

You can only get it removed if it doesn't apply.

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