What is fuel benefit tax?

A:

Fuel benefit or company fuel tax is charged for fuel that is paid for by your employer.

HMRC regards free fuel as a benefit-in-kind, like a company car that is provided for personal use.

If your employer provides you with free fuel for personal mileage, either via a fuel card or by expenses reimbursement, then you must pay fuel benefit tax.

Fuel card users that log their personal mileage and reimburse their employer for any fuel not used for business trips do not have to pay the tax.

The tax also does not apply to employees that are only entitled to reclaim fuel for business miles.

Electric vehicle drivers do not have to pay fuel benefit tax for any electricity paid for by their employer, even if it's for personal use.

Company paid fuel must be reported on an employees P11D. The tax amount charged will depend on the CO2 emissions of their company vehicle and their personal income tax banding.

In some cases the amount of tax owed may outweigh the amount you would spend on personal fuel, so it's important to work out how much tax you may owe.

Click here to find out how to calculate the fuel benefit tax amount.

More information on the rules around fuel benefit tax can be found on the Government website here: https://www.gov.uk/expenses-and-benefits-company-cars.