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Hi.If your car fuel benefit is £5,000, the minimum tax on that is £1,000 (20%) and the maximum is £2,000 (40%) depending on how much you earn. If you do 4,000 business miles and your employer does not pay you a mileage allowance, you will be able to claim tax relief on £1,800 (4,000 x 45 pence per business mile) which will save you tax of £360 at 20% or £720 at 40%. In addition, you will also pay between £1,000 and £2,000 less in tax as you will have no car fuel benefit. You need to compare your tax saving to how much you will spend on your total fuel costs and judge whether it is worthwhile giving up the fuel card or not.
Thanks for your response, but the 45 pence per business mile has confused me as I thought as I have a company car I could only claim 12 pence a mile. Is that now not the case? FYI the average yearly cost is between £800 and £900 pounds for fuel.
Yes, I will be keeping the company car as although that is also a similar extra amount of tax the company car is still much cheaper for me then buying a new or other car.