Search
Close this search box.
Sign up for our weekly Newsletter

Tax: why ‘free’ fuel isn’t free – the company car fuel benefit charge

Share

10 October 2006

Company car fuel benefit charge explained

Free fuel: costly benefit

WHEN a business pays for all the fuel used by one of its company car drivers, including private mileage, it is often called ‘free’ fuel.

The reality is that it’s anything but free.

The driver is taxed on it. The taxman levies a charge. He regards it as a benefit. It’s known as ‘the company fuel benefit charge’. The tax is calculated in a similar way to company car tax (see What is company car tax? also in this Law & Tax section).

However, instead of the list price of the driver’s company car, every driver uses the same nominal list price. For the 2007/08 tax year, this has been set at

Share this article

Facebook
Twitter
LinkedIn
WhatsApp
Reddit
Email

Want more motoring news?

Sign up here for our free weekly serving of motoring.

Sign up here for our free weekly serving of motoring.

Ralph Morton

Ralph Morton

Ralph Morton is an award-winning journalist and the founder of Business Car Manager (now renamed Business Motoring). Ralph writes extensively about the car and van leasing industry as well as wider fleet and company car issues. A former editor of What Car?, Ralph is a vastly experienced writer and editor and has been writing about the automotive sector for over 35 years.

Latest news

Top