{"id":23976,"date":"2023-01-17T10:35:34","date_gmt":"2023-01-17T10:35:34","guid":{"rendered":"https:\/\/smh.group\/?p=23976"},"modified":"2023-01-17T13:57:16","modified_gmt":"2023-01-17T13:57:16","slug":"company-cars-not-so-fuel-free","status":"publish","type":"post","link":"https:\/\/devstagesite.co.uk\/smhgroup\/company-cars-not-so-fuel-free\/","title":{"rendered":"Company cars: not so fuel free?"},"content":{"rendered":"

If your employer pays for the fuel in your company car, it may cost you more than you expected.<\/strong><\/p>\n

As the Autumn Statement was not a Budget, detailed publications that would normally emerge as the Chancellor sat down have taken time to appear. For example, the HMRC projections of how many more capital gains tax (CGT) payers there would be because of the much-reduced annual exemption (another 570,000 by 2024\/25) did not appear until the Monday after the Autumn Statement, missing the weekend personal finance pages.<\/p>\n

One even later arrival \u2013 three weeks after the Autumn Statement \u2013 was an HMRC bulletin on the fuel benefit charge for company cars in 2023\/24. For some years the basis has been an increase in line with September annual CPI inflation (published in mid-October), so there was no explicit reason for HMRC\u2019s procrastination. The number that was eventually revealed was the current figure, increased by 10.1%, as had been expected.<\/p>\n

Taxable value for 2023\/24<\/strong><\/h2>\n

That means for 2023\/24 if you have \u2018free\u2019 fuel, its taxable value will be assessed by multiplying \u00a327,800 by your car\u2019s percentage scale charge. For example, if you have a petrol-engine car with CO2<\/sub> emissions of 130\u2013134 g\/km, your scale charge is 31% and \u00a38,618 (\u00a327,800 x 31%) will be added to your income for tax purposes. In terms of hard cash, that is an extra \u00a33,447 going to the Exchequer if you are a 40% taxpayer.<\/p>\n

At this point you are probably wondering how far \u00a33,447 of petrol would take you. Assume a price of \u00a31.60 a litre and 40 miles a gallon and the answer is about 19,000 miles. In 2019, before the pandemic disrupted travel, the average car covered 7,400 miles a year. If that figure still applies \u2013 and it is probably less because of increased working from home \u2013 then the \u2018free\u2019 fuel break-even point is more than 250% of typical use.<\/p>\n

Not all benefits are so harshly taxed \u2013 electric cars can be an attractive option \u2013 but the large cost of \u2018free\u2019 fuel is a reminder that when it comes to anything financial, \u2018free\u2019 is a word to be treated with great caution.<\/p>\n

If you are unsure what is best for your circumstances, please contact our Sheffield based<\/span> Accounting & Business Advisory<\/strong><\/a> on 0114 266 4432<\/strong> or info@smh.group<\/strong><\/span><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

If your employer pays for the fuel in your company car, it may cost you more than you expected.<\/p>\n","protected":false},"author":4,"featured_media":23977,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[3,16],"tags":[83,629,77,11,19],"class_list":["post-23976","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-smh-accounting-business-advisory","category-financial-services","tag-chartered-accountants","tag-company-car","tag-financial-planning","tag-hmrc","tag-tax"],"acf":[],"yoast_head":"\nCompany cars: not so fuel free? - Accountants in Sheffield - SMH Group<\/title>\n<meta name=\"description\" content=\"If your employer pays for the fuel in your company car, it may cost you more than you expected.\" \/>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Company cars: not so fuel free? 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