What Is Company Car Fuel Benefit And Tax?

What Is Company Car Fuel Benefit And Tax?

Company Car Fuel Benefit

When free private fuel is provided for a company car with an internal combustion engine ('ICE') - such as petrol, diesel or a hybrid ICE/electric powertrain - there is an annual taxable benefit due on the perk.

However, when free private fuel is provided for a fully electric powered company car then there's no taxable benefit on the value of free recharging of the vehicle for business or private mileage.

The 'fixed benefit multiplier'

The perk value of free private fuel is based upon a notional benefit known as the 'fixed benefit multiplier'.

The amount of the fixed benefit multiplier is set each year in the Treasury's Annual Budget. The fixed benefit multiplier is then multiplied by a percentage based on the car's Carbon Dioxide ('CO2') emissions measured in Grammes Per Kilometre ('GP/Km').

To see a calculation of annual fuel benefit go to our company car and fuel benefit calculator.

To work our if private fuel benefit is worthwhile for you use our fuel benefit analyser.

The fixed benefit multiplier for 2023/2024 tax year is £27,800.

What is 'CO2 Output'?

CO2 output is determined by the amount of CO2 that a car emits from its exhaust, measured in Grammes Per Kilometre travelled (GPK/m).

The official value for a car is published by the Vehicle Certification Agency (“VCA”), an agency of the Department of Transport.

Published CO2 ratings are generally only available for cars that have been sold since 1 January 1998.

Calculating Company Car Fuel Benefit

To calculate the annual taxable benefit of free fuel provided in a company car:

For Petrol/Diesel engined cars:

  1. Go to the table for the date of first registration of the vehicle.
  2. Look up the CO2 output of the car in the 1st column of the table (e.g. for 63GP/Km look at the row 60-64).
  3. Read across the table to find the taxable percentage.
  4. If your car has a diesel engine, add a 4% surcharge to the table figure (up to a maximum of 37% including the surcharge) unless the car's engine meets the RDE2 standard for emissions.
  5. Multiply the fixed benefit by the percentage found.

For Hybrid engined cars:

  1. Go to the table for the date of first registration of the vehicle.
  2. Look up the CO2 output of the car in the 1st column of the table (e.g. for 45GP/Km look at the rows for 1-50).
  3. Read across to the next column to find the car's range in miles on battery power only, then read across that line to the appropriate tax year for the taxable percentage.
  4. If your car has a diesel engine, add a 4% surcharge to the table figure (up to a maximum of 37% including the surcharge) unless the car's engine meets the RDE2 standard for emissions.
  5. Multiply the fixed benefit by the percentage found.

High CO2 Output

If the car’s CO2 output exceeds the maximum figure, use the maximum.

Example

In the 2023/2024 tax year, for a petrol fuelled car, using the fixed benefit multiplier of £27,800, and assuming your company car's CO2 output is 100GP/Km, look down the 1st column of the table to find 100.

Next, move across to the current tax year column to find the taxable percentage (25%), then multiply £27,800 by 25% = £6,950 annual company car fuel benefit.



CO2 OUTPUT (G/PKm) ELECTRIC ONLY RANGE CARS REGISTERED FROM 6 APRIL 2020

PERCENTAGE OF LIST PRICE

2022-23 2023-24 2024-25 2025-26 2026-27 2027-28
0 N/A 2 2 2 3 4 5
1-50 >=130 2 2 2 3 4 5
1-50 70-129 5 5 5 6 7 8
1-50 40-69 8 8 8 9 10 11
1-50 30-39 12 12 12 13 14 15
1-50 <30 14 14 14 15 16 17
51-54 N/A 15 15 15 16 17 18
55-59 N/A 16 16 16 17 18 19
60-64 N/A 17 17 17 18 19 20
65-69 N/A 18 18 18 19 20 21
70-74 N/A 19 19 19 20 21 21
75-79 N/A 20 20 20 21 21 21
80-84 N/A 21 21 21 22 22 22
85-89 N/A 22 22 22 23 23 23
90-94 N/A 23 23 23 24 24 24
95-99 N/A 24 24 24 25 25 25
100-104 N/A 25 25 25 26 26 26
105-109 N/A 26 26 26 27 27 27
110-114 N/A 27 27 27 28 28 28
115-119 N/A 28 28 28 29 29 29
120-124 N/A 29 29 29 30 30 30
125-129 N/A 30 30 30 31 31 31
130-134 N/A 31 31 31 32 32 32
135-139 N/A 32 32 32 33 33 33
140-144 N/A 33 33 33 34 34 34
145-149 N/A 34 34 34 35 35 35
150-154 N/A 35 35 35 36 36 36
155-159 N/A 36 36 36 37 37 37
160-164 N/A 37 37 37 37 37 37
165-169 N/A 37 37 37 37 37 37
170+ N/A 37 37 37 37 37 37


Company Car And Fuel Benefit And Tax Calculator

You can look-up a calculation of company car and fuel benefit for all new cars with our company car and fuel benefit and tax calculator.


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(+44 1792 224319 outside UK)

info@drivesmart.co.uk