A Question on car allowance and fuel tax????

[Mako159th]

I am about to start a job whereby i recieve a car allowance and a fuel card....

I need a new car for this job, so am currently looking at either purchasing or leasing a car....

My question is this.....

The car allowance i understand is taxed as a normal earning - i.e. NI & TAX - how is the fuel taxed?? Does it have anything to do with the cars emisions or is it more to do with personal mileage? Also would it be better to buy or to lease the car?

Any pointers would be appricated.

Cheers

[Zak33]

youknow what....? I'm there too!

I pay for my own car on a lease, and DONT get a car allowance, but because I use my own car for business mileage, I can get a tax allowance, It's 40p per mile for the first 10,000, then 25p per mile thereafter (and a few pence extra is someone is in with me)

But I get a fuel card....and they wont give me a P11D, and my accountant is getting all upitty as she wants one.

So...I'm stuck too.

http://www.tax.uk.com/taxrates0506.html

best site I;ve found so far....scroll down for cars

[piggeh]

Originally Posted by Mako159th

I am about to start a job whereby i recieve a car allowance and a fuel card....

I need a new car for this job, so am currently looking at either purchasing or leasing a car....

My question is this.....

The car allowance i understand is taxed as a normal earning - i.e. NI & TAX - how is the fuel taxed?? Does it have anything to do with the cars emisions or is it more to do with personal mileage? Also would it be better to buy or to lease the car?

Any pointers would be appricated.

Cheers

If your work pay for your personal mileage, then it is a taxable benefit. I'm not sure how it's calculated but there's some online calculators that will show you the values. I'm pretty sure mileage doesnt come into it as the online calculator only asks for CO2 emissions, value, etc, and not for your annual mileage.

http://cccfcalculator.inlandrevenue.gov.uk/CCF0.aspx

Depends on your budget whether to buy or lease a vehicle. The hassle free way is to get a fully maintained contact hire vehicle. Then you have tyres, servicing, repairs, etc, all included.

[SteveL]

Originally Posted by Mako159th

The car allowance i understand is taxed as a normal earning - i.e. NI & TAX - how is the fuel taxed?? Does it have anything to do with the cars emisions or is it more to do with personal mileage? Also would it be better to buy or to lease the car?

I have the same situation. Car Allowance and fuel card. I don't do any company mileage at all, so all mine is private. The fuel card simply shows up as the amout I've paid on petrol as a taxable benefit. Nothing to do with emissions or mileage, just the total cost of my petrol for the year. I 'm not sure if the same applies if you're doing company miles as well, but I can't see why not. Your company is simply giving you the cost of the petrol as a benefit.

My allowance is anough to pay off my car loan in 3 years. After that (the car has to be less than 6 years old) I get 3 years of car allowance straight into my savings, and at the end I have an asset to trade in for the next car. I didn't even consider leasing.

Steve

[Mako159th]

leasing seems to be an expensive way to go tbh. I appreciate that the car is maintained etc etc, but I think I have decided to go down the road of buying a reasonable (30k miles) exec saloon for about £12k using my current car as a deposit.

As long as i dont loose the money I put in (I.e. my current car) in the long run, I can't see a problem.

From what I have read it is only the personal mileage that is taxable... in which case i am not too bothered as I wont be doing much.

Anyway thanks for the advice.

[Honoop]

Ahh but therein lies the problem, if you are using the car for both private and business mileage then unless you keep a strict and comprehensive record of your mileage and whether it is business or private then you will get taxed on all of it.
Im trying to dredge my brain for the knowledge I acquired for my tax exam last year now!!
And I believe that if you have a fuel card then it is all taxable - and it is taxed at the same rate as the car.

Jen

[Mako159th]

After discussing this with a few people in the same situation - my understanding is as follows:

Car allowance - Taxed as Normal income tax & NI

Fuel card - either:

A: flat percentage of total use (including business mileage) taxed as personal mileage (I believe 9%) - as it is seen as a perk it gets taxed as such (paid/taxed yearly)

B: Recorded and reported to employer in order that factual personal mileage taxed on a monthly basis.

[Ivor]

I have a question that I am desperate for some answers for.

My current employers have given us all fuel cards. We all use our own cars as company cars are not provided. We do not get an allowance from the company for depreciation or milage. However, we are under strict guidelines that we only use the fuel cards for business miles only, (which is fair enough) , yet can the Inland Revenue "punish individuals" for using some petrol for personal use?

Can we ask our company to pay us directly for depreciation or milage clocked?
Can the Inland Revenue question/charge the employees should they feel our fuel cards are not being used for business?
What are our entitlements as employees as the rules have not been clearly pointed out?

Any help would be greatly appreciated.

[piggeh]

Not so sure what powers the IR would have - if they did get wind of such things I'd imagine they'd investigate somehow. However it would have to be pretty obvious that the personal mileage is being funded by the fuel card as they'd have no idea on fuel economy etc- you could just have a heavy foot on the pedal.

However I would really question how your company meets its duty of care for employees when driving their own vehicles. They have no idea as to the condition of them and whether they are maintained correctly (especially if they feel they're not going to finance and maintenance items). If someone has an incident that comes down to a poorly maintained vehicle, then the company will be liable and Directors could face jail if it leads to a death.

[Tumble]

The way it works for me is: I have a VAN and a fuel card. Now as long as my tools are in the back, I don't get taxed on fuel or anything. My employers are pretty good in that they let us use the vehicles out of hours for private use without any quibbles on the fuel cards. If I had a car, I would have to keep a record and pay for personal mileage. I belive it's something to do with the fact that the employer can claim the VAT back on the Diesel that's used in the vans (marked up with company logo) but not on any cars, regardless of whether they're marked up or not.

So - if you can get away with a van, sitckered up with the company's logo, you might get away with it *























*may be complete ballcocks

[Ivor]

Thanks for the advice peeps.

Stay Cool!

[Ivor]

Does anyone know of a website that I can visit to check the responsibility of an employer when not providing a company car or the funds to maintain he vehicle?

Surely I am entitled to money back for depreciation? I have done nearly 16'000 miles since February this year!

Any advice would be greatly apprecated.

[chadders]

You should be claiming business mileage back off them (a pence per mile figure) - covers fuel and fair wear & tear (which will include depreciation) etc - for anything where you drive for them, except to and from place of work. Plus you should check you are covered on your insurance for "business use".

edit: it also appears that if the employer isn't paying the recommended amount, you can put in a claim as tax relief.

[Ivor]

That's brilliant advise. Thanks.

Is there a website I can visit and print off the information you just mentioned? My employers are the kind of people who want everything in black and white.

[chadders]

TBH your employers should speak to their accountants who will advise them - esp. considering that the employer may well be better off (tax breaks) paying the recommended amounts.

You can start here: Mileage - Employee Fact Sheet

edit: I never knew you can claim "bicycle mileage" @ 20p per mile also, there's also breaks for carrying passengers (on business mileage).

edit: you may also wish to point out to employers asking you to use private cars, that they may well need to look into Health & Safety issues - with a company car they know where they stand in terms of MOT, servicing and road-worthiness, but not so with private cars - there *may* be an issue with them being responsible for checking.

edit: also see if there's anything about off setting your increased business insurance premium, perhaps against personal tax?

[Ivor]

Chadders!

Thanks for the advise so far! I have just one more question. We (as a business) also have people who are self emploed contractors. The too are provided a fuel card by our company - yet still have to use their own vehicles. Are they able to claim on mileage as normal employees are?

Thank you for all your help.