Use of Company Cars, Refund to Company for Private Use Fue
Discussion
We have a situation where a number of employees have cars provided. They are allowed to use them for personal use, however, we want them to repay the fuel cost of the private miles to avoid the BIK for fuel for private use.
What rate should we charge them? Should it be the HMRC guidance for fuel claims for company cars, e.g. 15p/mile for petrol car less than 1400cc? If we charge them, say, 25p/mile will they be able to claim the 10p difference back as a contribution to use of the car and reduce their actual car BIK?
I cannot find any sensible guidance on this online.
Many thanks in advance.
What rate should we charge them? Should it be the HMRC guidance for fuel claims for company cars, e.g. 15p/mile for petrol car less than 1400cc? If we charge them, say, 25p/mile will they be able to claim the 10p difference back as a contribution to use of the car and reduce their actual car BIK?
I cannot find any sensible guidance on this online.
Many thanks in advance.
My last company car came with an optional "reimburse" fuel card for this reason, although we could opt for a normal card and get taxed. At the time, we paid back at 13p a mile. Bit of a pain submitting weekly mileage logs.
Not sure why you would want to "overcharge" the employees though?
Not sure why you would want to "overcharge" the employees though?
andburg said:
Go the other way?
Drop the fuel cards and let employees claim back business miles are the approved rates
It worked this way for me for 20 years and 3 employers - pay with my own credit card, claim mileage back weekly. It was only for the last couple of years that we had to take a fuel card.Drop the fuel cards and let employees claim back business miles are the approved rates
I quite liked claiming the mileage, as I could drive economically and make enough profit to cover the the car contributions.
Using the HMRC rates is probably easiest for you and won’t present much of a challenge, unless you are providing certain hybrids which don’t translate consumption to engine size very well (Toyotas in our case)
The other way I have done in the past is to log all fuel bought on the card in the month and then work out the ratio of business/private miles and the driver pays back the appropriate amount. There’s a small amount of inaccuracy in this as the purchase/use won’t fit exactly into the month but it evens out generally
The other way I have done in the past is to log all fuel bought on the card in the month and then work out the ratio of business/private miles and the driver pays back the appropriate amount. There’s a small amount of inaccuracy in this as the purchase/use won’t fit exactly into the month but it evens out generally
MustangGT said:
andburg said:
Go the other way?
Drop the fuel cards and let employees claim back business miles are the approved rates
That is indeed my recommendation. Waiting for directors decision.Drop the fuel cards and let employees claim back business miles are the approved rates
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