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Company cars

Employers should be familiar with the calculation of car and fuel benefits, in particular the need to obtain the following details from the supplier:

1. Ìý

   •ÌýÌýÌýÌý list price

2. Ìý

   •ÌýÌýÌýÌý cost of added accessories, and

3. Ìý

   •ÌýÌýÌýÌý CO₂ emissions

A key danger area is the provision of private fuel. Over the past few years many employees have opted out of company car fuel arrangements. However, rather than 'give up' their fuel card or credit card, they make good the cost of the private fuel using HMRC Advisory Fuel Rates. The provision of just one mile of private fuel gives rise to a fuel benefit charge¹ for the whole year (or the period the car was provided if less than a complete tax year). Mistakes include:

1. Ìý

   •ÌýÌýÌýÌý incomplete or poor mileage records

2. Ìý

   •ÌýÌýÌýÌý home to permanent workplace being treated as business mileage

3. Ìý

   •ÌýÌýÌýÌý maintaining private mileage records rather than business mileage records, and

4. Ìý

   •ÌýÌýÌýÌý incorrect interpretation of the definition of a temporary workplace²

Example

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