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Company Fuel Tax
A Guide to Understanding Fuel Benefit
Company fuel tax, also known as fuel benefit, is a tax on any fuel in your company car that is used for personal use.
You should be aware that travelling to and from work is classed as personal use.
The tax applies to any fuel you use a business fuel card to buy, or that you pay for personally but are then reimbursed by the company for.
Please note that even if you only have free fuel for a portion of the year the fuel tax will be applied for the full tax year.
For employers, you will need to report on form P11D and pay class 1A national insurance on the value of the fuel benefit for any fuel for private use that your employees do not repay the business for.
There are a few occasions where you may be exempt from paying this tax.
To work out the tax for your company car you will need to know the BIK rate.
For more information on how to find out what the BIK tax on your vehicle will be please take a look at our Guide to Company Car Tax.
The BIK percentage is multiplied by a fixed sum to calculate the company fuel tax and then your personal tax margin to work out the fuel tax you will need to pay.
The current amount is £24,100.
For example, if your BIK percentage was 25% then you would need to multiply £24,100 by 25% which would give you £6,025.
You will then multiply this by your tax margin (which is usually 20% or 40%), so in this example £6,025 x 20% = £1,205.
This is the amount you would need to pay over the year.