The easiest way to ensure that no car-fuel benefit charge (for private journeys in a company car) is payable, is to use the advisory fuel rates published by HMRC to repay any private fuel costs to your employer. The advisory fuel rates are intended to reflect actual average fuel costs and are updated quarterly.
However, the car-fuel benefit charge will still be payable if it cannot be demonstrated to HMRC that the driver of the car has paid for all fuel used for private journeys, this includes commuting to and from work. To ensure that this does not occur employees will need to keep a log of private mileage.
The latest advisory fuel rates became effective on 1 December 2018. Fuel rates are reviewed four times a year with changes taking effect on 1 March, 1 June, 1 September and 1 December.
Action to take before 5 April 2019
If you have a company car and your employer pays for all your petrol you will need to work out your actual private mileage for 2018-19, multiply this by the appropriate advisory fuel rate, and pay this amount to your employer.
This will avoid being charged the expensive car-fuel benefit – in most cases the tax saved will be more than the amount of your repayment to the employer.
If in doubt, give us a call and we will help you crunch the numbers.