Fuel Benefit Charge
When a employee receives private fuel free of charge from their employer a benefit arises and the employee is charged tax at their marginal tax rate on the value of the private fuel benefit.
Questions you may ask:
- What is the costs of providing private fuel for my employees to my company and for my drivers?
- How is the charge calculated for private fuel?
- Is there any charge for using Electric vehicles and charging them at work?
How does it work?
The fuel benefit charge is calculated by multiplying the fuel benefit charge multiplier by the car’s appropriate percentage; that is the CO₂ emissions derived percentage used to calculate the car benefit charge, including any diesel supplement.
No fuel benefit charge is payable if the employee is contractually required to ( and actually does) reimburse its employer the full cost of any fuel used for non business journeys, this reimbursement can be made at a value equal to the actual cost of fuel purchased or by using the appropriate HMRC'S Advisory Fuel Rates
For agreements entered into from 6 April 2017, if a cash allowance is offered but the fuel benefit is selected, should the CO₂ emissions of the company car exceed 75 g/km the fuel benefit charge will be the greater of the annual cash allowance and the cash equivalent of the fuel benefit.
Fuel Benefit Charge Multiplier (FBCM)
| Car Fuel Benefit Charge | 2018/19 | 2019/20 | 2020/21 | 2021/22 | 2022/23 | 2023/24 | 2024/25 |
|---|---|---|---|---|---|---|---|
| Cars | £23,400 | £24,100 | £24,500 | £24,600 | £25,300 | £25,300 | £27,800 |
Electric Vehicle Charging - Currently no fuel benefit charge is due from an employee that utilises their employers facilities to charge their vehicle.
The car fuel benefit charge is reduced proportionately if any of the following occurs:
- Private fuel ceases to be made available to the employee part way through a tax year
- A company car is only made available for part of a tax year.
- The use of the vehicle is shared
The Government has confirmed that the FBCM will continue to increase by RPI for cars.
The information provided is based on existing and proposed legislation as at March 2020 (11th March 2020 UK Budget). Whilst every effort has been made to ensure that information given is accurate and not misleading, this information is intended to provide a quick reference to the current tax regulations relating to company vehicles and how they impact employers and employees. The content has been provided for informational purposes only and should not be relied on as a substitute for professional advice. No responsibility can be accepted by LetsTalkFleet Ltd for any loss or liability occasioned by any person acting on or refraining from action as a result of viewing this information.
When a employee that drives a company van receives private fuel free of charge from their employer a benefit arises and the employee is charged tax at their marginal tax rate on the value of the private fuel benefit.
Questions you may ask:
- What is the tax treatment for providing fuel for van drivers?
- Who is responsible for paying any tax liability for private fuel for vans?
- What happens if the van is only made available for part of a tax year?
No fuel benefit charge is payable if the employee is contractually required to ( and actually does) reimburse its employer the full cost of any fuel used for non business journeys, this reimbursement can be made at a value equal to the actual cost of fuel purchased or by using the appropriate HMRC'S Advisory Fuel Rates.
How does it work?
The Van Fuel Benefit charge is a flat amount per the table below
| Van Fuel Benefit Charge | 2018/19 | 2019/20 | 2020/21 | 2021/22 | 2022/23 | 2023/24 | 2024/25 |
|---|---|---|---|---|---|---|---|
| Vans | £633 | £655 | £666 | £669 | £688 | £688 | £757 |
The van fuel benefit charge is reduced proportionately if any of the following occurs:
- Private fuel ceases to be made available to the employee part way through a tax year
- A company van is only made available for part of a tax year.
- The use of the vehicle is shared