Company car

[ludwig]

Can anyone briefly explain the income tax implications of having a fully funded company car - ie all costs including petrol paid - likely to be high mileage usage.
thanks.

[mattie]

It depends - Normally speaking the tax office will see this as a perk, fully funded car with a fuel card, basically free fuel. To offset this my company charges me for car use which is deducted from my salary every month.

You need to fill in a P11D form for the car, this is used by the tax office to calculate how much tax you should be paying, your company may do this for you, but it is worth checking.

My previous company operated a different system, I returned the fuel card, stopped paying the monthly charge for car use, and paid for the fuel myself via credit card, and claimed back my business mileage, and paid for my private fuel usage.

This is better for you taxwise, but some companies won't do this as it involves more administration.

[Buenchico]

HMRC will calculate a 'benefit in kind' based upon the list price of the car, the type of fuel used, etc. You then have to pay tax on that benefit in kind, in just the same way as if you received that amount as part of your gross pay.

To find the 'benefit in kind' for your car, simply use the online calculator here:
http://cccfcalculator.inlandrevenue.gov.uk/CCF 0.aspx

Chris

[ludwig]

thanks guys