Company Car Tax

[Reggie79]

Hello, appreciate some thoughts on the following...

I have had a company car and private fuel benefit for some time, now I understand how to calculate how these costs I am planning (growing family) to 'opt out' and buy a car and receive the cash benefit from my company. But the fuel options confuse me. I appear to have two options with my company..
1.With my company you can have a fuel card, they pay for your all fuel and you claim back business miles at the 40/25p rates. Sounds Good to me, I pay for around 40% of the fuel cost and then claim back the business mileage.

2. No Fuel Card, pay pump price for all fuel at my own expense, and claim back business miles at the 40/25p rates. I must be misunderstanding here, Option 2 makes one considerable less well off than option 1.

Appreciate your thoughts.

Regards

[robbob]

Hi Reggie

Are you sure option 1 is correct?

If we are talking fuel only i would suspect

either

company pays all fuel and you reimburse for private useage at advisory rate

http://www.hmrc.gov.uk/cars/advisory_fuel_current.htm

Or you pay for all fuel and claim advisory rate from company.

However if you own your own car you can claim for 40p/25p a mile but this would include all car expenses so any amounts received tax free for fuel would have to be taken into account as payments on account.

To make things more complicated you can either claim mileage from taxman or company could pay you authorised rate . The company paying you would probably be better but not all companies like doing this this sounds like the case here if they are giving you cash lump sum instead.

I would recommend you ask your company exactly how things oparate and who you need to make claims from and if there will be any benefit charge if they are paying for your fuel.

[taxattack]

Reggie

My interpretation of Option 1 is that the payments for fuel (via the fuel card) will count towards the 40/25p/mile allowance.

Say you do 20,000 miles, half of which is business mileage, and put £2,500 on the fuel card. You are entitled to AMAP of £4,000, so a further £1,500 could be paid to you.

With the same total mileage, but only 5,000 for business, the AMAP would be £2,000, and therefore the excess £500 would be taxable.

chris @ taxattack.co.uk

[Reggie79]

Thank You for your thoughts.

I think I am nearly there on my understanding,

My esimated spend on a fuel card would be £6.6k PA, 28,200 miles. 18,200 Business and 10,000 miles for private.

I calculate that my AMAP would be £6050, therefore I could not claim any miles back on this? As From your (Chris) notes it would appear that the the 'excess'between card spend of £6.6k and AMAP (£6050), £550 would be taxable. This is the bit I do not understand as I would pay tax on the whole £6.6k anyway?


Also Robbob - My option 1 is pretty much word for word our company policy, what our policy does not explain, is that if your AMAP entitlement is less than the fuel spend, you can't claim back anything. I think..
Appreciate your patience. I guess if I am right on the above, paying for my own fuel and claiming back the business miles as above may make sense?

Appreciate your patience

Reggie