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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15975
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I drive approximately 4000 miles per year on mainly business

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I drive approximately 4000 miles per year on mainly business and a small amount of private mileage, and have a company car and fuel card. I am now going to be taxed this financial year forty percent of just over five thousand pounds in car fuel benefit.
Is it still worth me having a fuel card or could I just by my own and claim a percentage back from Hmrc?


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.

Customer: replied 4 years ago.

Hi Tony


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.

From your reponse can I assume that you won't be giving up the company car itself?
Customer: replied 4 years ago.

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.


Read the notes here and then take a look at the advisory rates here. They are what can be paid to you by your employer tax and NIC free for business mileage.

The rates I gave you previously were for an employee using their own car for business mileage.
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