Advisory Fuel Rates from 1st September 2017

Fuel rates

For employees using a company car, the new fuel rates for use from 1 September are as follows:

Engine Size Petrol LPG Diesel
Amount per mile (in pence)
1400cc or less 11 7 9
1401cc to 1600cc 13 8 9
1601cc to 2000cc 13 8 11
Over 2000cc 21 13 12

For the purpose of fuel rates, hybrid cars are treated as either petrol or diesel cars.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Tax and Your Company Car

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There are many factors which will influence your choice of company car. These can include the distance you travel, terrain covered, the price, your lifestyle and perhaps even your clients. However, is tax ever a consideration?

The start of the tax year saw an increase in the company car rates and indeed the rates are increasing quite significantly year on year. Assuming however that you have some degree of choice over the car make and model, you can influence the tax that you pay.

The two factors which determine the tax charge attached to a company car are the list price of the vehicle and its CO2 emissions.

The table below shows the benefit in kind charge for cars with various, hypothetical,  list prices and CO2 emissions.  The rates applicable to the current tax year (2017/18) have been used.

List price CO2 emissions Fuel type Benefit in kind value
£17,000 102g/km Petrol £3,230
£25,000 99g/km Petrol £4,500
£25,000 117g/km Diesel £6,250
£35,000 0g/km Electric £3,150
£50,000 41g/km Electric/Petrol £4,500
£50,000 155g/km Diesel £16,500

In addition to the company car benefit there is also a fuel benefit if the employer provides fuel for private use; the value of the fuel benefit is affected by the CO2 emissions but not by the list price.

Although tax will not be the only issue affecting your choice of company car, perhaps it ‘auto’ be a consideration?

If you’d like any more information please contact Green & Co Accountants.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Advisory Fuel Rates from 1st June 2017

Fuel rates

For employees using a company car, the new fuel rates for use from 1 June are as below:

Engine Size Petrol LPG Diesel
Amount per mile (in pence)
1400cc or less 11 7 9
1401cc to 1600cc 14 9 9
1601cc to 2000cc 14 9 11
Over 2000cc 21 14 13

For the purpose of fuel rates, hybrid cars are treated as either petrol or diesel cars.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

VAT Fuel Scale Charge

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To make accounting for private use of fuel simpler, you can choose to apply the VAT fuel scale charge. This scale charge adds back a fixed sum each VAT period to account for the private use of fuel, making redundant any need to split the mileage between business and private use.

The scale charge for any given vehicle is based upon its CO2 emissions. HMRC update the scale charge table every May, and this years can be found here.

Scale charges only apply to those cars where there is allowed private usage, and when you start using the scale charge, you must use it on all your company’s cars for which there is private use.

Those using the scale charges, should be sure to keep a record of:

  • Number of cars which it is applied to
  • CO2 band of each car (or cylinder capacity if the car is too old for an emissions figure)
  • Details of when cars have been bought and/or sold.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

 

Advisory Fuel Rates from 1st March 2017

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For employees using a company car, the new fuel rates for use from 1st March are as below:

Engine Size Petrol-amount per mile LPG-amount per mile Diesel-amount per mile
1400cc or less 11 pence 7 pence 9 pence
1401cc to 1600cc 14 pence 9 pence 9 pence
1601cc to 2000cc 14 pence 9 pence 11 pence
Over 2000cc 20 pence 14 pence 13 pence

For the purpose of fuel rates, hybrid cars are treated as either petrol or diesel cars.

Advisory Fuel Rates From 1st June

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For employees using a company car, the new fuel rates for use from 1st June are as below:

Engine Size Petrol-amount per mile LPG-amount per mile Diesel-amount per mile
1400cc or less 10 pence 7 pence 9 pence
1401cc to 1600cc 13 pence 9 pence 9 pence
1601cc to 2000cc 13 pence 9 pence 10 pence
Over 2000cc 20 pence 13 pence 12 pence

For the purpose of fuel rates, hybrid cars are treated as either petrol or diesel cars.

Advisory Fuel Rates From 1st March 2016

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For employees using a company car, the new fuel rates for use from 1st March are as below:

Engine Size Petrol-amount per mile LPG-amount per mile Diesel-amount per mile
1400cc or less 10 pence 7 pence 8 pence
1401cc to 1600cc 12 pence 8 pence 8 pence
1601cc to 2000cc 12 pence 8 pence 10 pence
Over 2000cc 29 pence 13 pence 11 pence

For the purpose of fuel rates, hybrid cars are treated as either petrol or diesel cars.

Image courtesy of supakitmod at FreeDigitalPhotos.net

Advisory Fuel Rates From 1st December

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For employees using a company car, the new fuel rates for use from 1st December are as below:

Engine Size Petrol-amount per mile LPG-amount per mile Diesel-amount per mile
1400cc or less 11 pence 7 pence 9 pence
1401cc to 1600cc 13 pence 9 pence 9 pence
1601cc to 2000cc 13 pence 9 pence 11 pence
Over 2000cc 20 pence 13 pence 13 pence

For the purpose of fuel rates, hybrid cars are treated as either petrol or diesel cars.

Image courtesy of supakitmod at FreeDigitalPhotos.net

Is It Time To Ditch Your Fuel Charge Benefit?

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The car benefit charge multiplier increased from £21,700 to £22,100 on 6 April 2015 and, with effect from 6 April 2016, will increase again in line with the retail prices index. The equivalent benefit for vans is £594 and, again, will increase in line with the retail prices index.

This means, for example, if your company car has CO2 emissions between 120-124 you will incur a fuel benefit charge of £3,990 for a petrol car (£22,100 x 19%) or £4,862 for a diesel car (£22,100 X 22%)

For a higher rate taxpayer the cost in terms of extra tax is either £1,596 or £1,945 respectively. As the multiplier is to increase, so will the benefit. The higher the Co2 emissions for the car, the higher the benefit, so for a car with emissions between 140-144 the benefit increases to £5,083 and £5,746, or extra higher rate tax of £2,033 and £2,298.

If the amount you would spend on private fuel is below the tax you pay on the benefit then it is time to have a rethink on how you claim the fuel you use for business purposes and so avoid any benefit.

Green & Co can offer advice to ensure that the most tax advantageous method is implemented. Please contact us for further information.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Image courtesy of Michelle Meiklejohn at FreeDigitalPhotos.net