# Company Fuel Card - How Much Am I Paying?



## Nanoman (Jan 17, 2009)

As part of my job I get a fuel card which I have to use for all fuel purchases in my car. I log business miles in a portal at the end of every month.

I can't work out how much this is actually costing me. Can anyone help?

My payslip shows an amount for MILEAGE which is the same amount in 'Pay & Allowances' and 'Deductions'. This equates to 45p per mile for business miles logged for the previous month in the portal. There's a note saying 'Non-Taxable Allowance: Payment to You: NOT subject to Tax / NI. This is the value of your business mileage calculated at current HMRC rate'.

There's another amount in 'Pay & Allowances' for FUEL which is the cost of fuel spent on the fuel card in the previous month. There's a note saying 'Non-Payable Allowance: NOT paid. This is the cost of fuel purchased on your fuel card the previous month. You will be taxed and NI'd on the full amount if it was all personal miles. Using the portal ensures business miles are offset and therefore your tax and NI bill are smaller'.

Example numbers:

I did 1000 business miles and spent £150 on fuel in Month 1. In month 2 my payslip would say:

Pay and allowances:
Basic, bonus, etc
MILES £450 (Not taxable)
FUEL £150

Deductions:
Income tax, NI, pension, etc
MILES £450

Can anyone translate this to work out how much I actually pay? I think I'm just paying income tax and NI on the fuel card spend but can't work out where this bit comes in 'Using the portal ensures business miles are offset and therefore your tax and NI bill are smaller'.

Previously when I had a fuel card I logged personal miles not business miles which were deducted at 11p per mile in the deductions section of my payslip.

I'm so confused.


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## Andyg_TSi (Sep 6, 2013)

Are you using your own car for work, or is it a company car?

To try and make it a bit clearer, the 45p per mile is an all on one mileage allowance for using your own car for business mileage.

So total mileage X 45p = £amount upon which tax relief is due.

£amount upon tax relief is due X your marginal tax rate = £tax refund.

So, assume you do 10,000 business miles per year;

10,000 X 45p = £4500.

£4500 X 20% (basic rate) = £900 relief. 

This relief is then offset against the taxable element of any private use of fuel.

All depends if your basic rate or higher rate & your weekly/monthly mileage & fuel use


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## Andyg_TSi (Sep 6, 2013)

If that £150 fuel was taxable at 20% leading to a tax charge of £30, but you were due relief on £450 at 20%...£90 then the net effect is a £60 net refund/relief.....


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## Nanoman (Jan 17, 2009)

Andyg_TSi said:


> Are you using your own car for work, or is it a company car?
> 
> To try and make it a bit clearer, the 45p per mile is an all on one mileage allowance for using your own car for business mileage.
> 
> ...


I get a car allowance and use my own car. If I follow you correctly it's possible that if I'm doing enough business miles and not a lot of personal miles I might end up getting a benefit from it rather than it costing me anything. I pay the higher rate in tax.


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## B17BLG (Jun 26, 2012)

I also have a fuel card company with a company car. I'm really not sure what I'll be paying. From what I u derstand at the moment I pay a tax on emissions and car value. 

It's a new world for me also


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## Andyg_TSi (Sep 6, 2013)

Nanoman said:


> I get a car allowance and use my own car. If I follow you correctly it's possible that if I'm doing enough business miles and not a lot of personal miles I might end up getting a benefit from it rather than it costing me anything. I pay the higher rate in tax.


Ok, so in my example, you multiply by 40%, not 20%.

And yes, that mileage rate is a catch all to reimburse you for wear & tear, servicing, extra depreciation on your own vehicle etc etc.

If you do enough mileage over the course of a year, then the tax refund due should reduce your overall tax liability.

In your case doing 10, 000 business miles will result in a £1800 refund being due

10,000 × 45p × 40% = £1800

If you didn't have the fuel card and that was your total mileage then that's approximately what you'd be due back (or pay less in tax over the year due to the extra allowances)

Whatever relief you are due on the business miles is offsetting itself against and tax due on the fuel benefit.

Hooe this makes sense


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## Andyg_TSi (Sep 6, 2013)

B17BLG said:


> I also have a fuel card company with a company car. I'm really not sure what I'll be paying. From what I u derstand at the moment I pay a tax on emissions and car value.
> 
> It's a new world for me also


Correct,

For example, let's assume the cars on the road value is £25k & the emissions rate (taxable benefit) is 18% of the cars value based on emissions.

So for 'benefit' purposes, the amount upon which tax is due is £25, 000 X 18% = £4, 500.

£4, 500 × your top tax rate (either 20% or 40%) = tax due that you'll pay.
So in this case if your basic rate (20%) total tax due is £900.

So your paying £900 for the privilege of having a 25k car parked on your drive, available for private use from your gross pay.....


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## Nanoman (Jan 17, 2009)

But... if I do spend more on fuel than I get relief for business miles I only actually pay Tax & NI on the fuel cost. 

So if there is a month where I do ZERO business miles because I'm flying everywhere but I spend £200 on fuel for personal miles then it's actually going to cost me 40% of £200. Is that right?


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## B17BLG (Jun 26, 2012)

Andyg_TSi said:


> Correct,
> 
> For example, let's assume the cars on the road value is £25k & the emissions rate (taxable benefit) is 18% of the cars value based on emissions.
> 
> ...


£900 over the year? So about £75 a month. Not bad at all really. Even at the 40% rate it's good.

Let's work on the basis that I will have a car worth circa 27K. Does the amount payble on fuel go on the cars emissions?


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## Andyg_TSi (Sep 6, 2013)

Nanoman said:


> But... if I do spend more on fuel than I get relief for business miles I only actually pay Tax & NI on the fuel cost.
> 
> So if there is a month where I do ZERO business miles because I'm flying everywhere but I spend £200 on fuel for personal miles then it's actually going to cost me 40% of £200. Is that right?


That's right mate,

I just need to look up the legislation on fuel, as I'm unsure as to whether there is a flat rate benefit charge for fuel provided or if it's just based on actual use.


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## Andyg_TSi (Sep 6, 2013)

This is worth looking at.....

http://www.hmrc.gov.uk/manuals/eimanual/EIM25500.htm

And this.......look for eim24000 from this

http://www.hmrc.gov.uk/manuals/eimanual/eim23000.htm


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## Andyg_TSi (Sep 6, 2013)

B17BLG said:


> £900 over the year? So about £75 a month. Not bad at all really. Even at the 40% rate it's good.
> 
> Let's work on the basis that I will have a car worth circa 27K. Does the amount payble on fuel go on the cars emissions?


You pay tax & NIC on the 'cash eqivalent' of the vehicle, the cash eqivalent being the P11D value (OTR price X emissions value%)

In that example £900 will be the tax element, they'll also be the NIC to pay on top of that (think it's about 11% or 12%)


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## Nanoman (Jan 17, 2009)

Andyg_TSi said:


> This is worth looking at.....
> 
> http://www.hmrc.gov.uk/manuals/eimanual/EIM25500.htm
> 
> ...


Are they available in english?


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## Andyg_TSi (Sep 6, 2013)

This covers mileage rates Nanoman & is very straightforward

https://www.gov.uk/expenses-and-benefits-business-travel-mileage/rules-for-tax


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