COMPANY car drivers who receive ‘free’ fuel will pay more for the perk, the Chancellor announced in his 2016 March Budget.
The Chancellor confirmed in the Budget his Autumn Statement announcement that the fuel benefit charge multiplier for company cars would increase from £22,100 in 2015/16 to £22,200 in 2016/17.
It will rise further by the rate of inflation from April 6, 2017.
If we were to take a driver of our SME Company Car of the Year Vauxhall Insignia who took free fuel from his employer, the benefit in kind for the 2013/14 tax year is £2954.
Free fuel perk gets more expensive
However, from the 2014/15 tax year with the new multiplier the fuel benefit in kind tax rises to £3255.
For a 20% tax rate payer that’s a yearly increase of £60 to £651, or £54 a month.
Mark Groom, tax partner at Deloitte, commented: “Employers may come under added pressure from employees who wish to alleviate the increasing tax cost of company cars and fuel.”
There was no change in the AMAP rates for employees using a private car on business. These remain at 45p per mile for the first 10,000 miles, dropping to 25p thereafter.
