mjheathcote
Centenary Club
- Messages
- 9,046
I'm in the process of changing jobs, and the way they work with company cars and fuel is quite different.
Presently, I get a paid for company car, pay tax on BIK, have a fuel card and pay back all personal mileage to avoid tax.
The new job would be a car allowance, and fuel card for all by business and personal mileage.
From what I understand, because I get a car allowance, the value of all the fuel that is paid on the fuel card, is put down on the P11d as a benefit in kind.
Then you claim back on your tax return for the business miles, 45p first 10,000 miles, 25p thereafter.
So some typical figures:
Total mileage 25,000 a year, in a typical car doing 40 mpg.
Total cost of fuel approximately £3,550
£3,500 goes on your P11d that you pay tax on, at 40%, this would cost me £1,420 a year.
You then claim back the business miles.
20,000 miles business a year
10,000 x 0.45 = £4,500
10,000 x 0.25 = £2,500
Total £7,000
40% tax claim on £7,000 is £2,800
Therefore £1,420 less £2,800 is minus £1,380
So....not only do I get my private fuel for free, but £1,380 less tax to pay?
Have I got this right???
I'm an Engineer not an accountant!
Presently, I get a paid for company car, pay tax on BIK, have a fuel card and pay back all personal mileage to avoid tax.
The new job would be a car allowance, and fuel card for all by business and personal mileage.
From what I understand, because I get a car allowance, the value of all the fuel that is paid on the fuel card, is put down on the P11d as a benefit in kind.
Then you claim back on your tax return for the business miles, 45p first 10,000 miles, 25p thereafter.
So some typical figures:
Total mileage 25,000 a year, in a typical car doing 40 mpg.
Total cost of fuel approximately £3,550
£3,500 goes on your P11d that you pay tax on, at 40%, this would cost me £1,420 a year.
You then claim back the business miles.
20,000 miles business a year
10,000 x 0.45 = £4,500
10,000 x 0.25 = £2,500
Total £7,000
40% tax claim on £7,000 is £2,800
Therefore £1,420 less £2,800 is minus £1,380
So....not only do I get my private fuel for free, but £1,380 less tax to pay?
Have I got this right???
I'm an Engineer not an accountant!