Fuel for private use A separate charge applies where private fuel is provided by the employer for a company car. The charge is calculated by applying the same percentage figure used to calculate the company car benefit to a fixed figure which for 2021/22 is set at £24,600. No fuel benefit applies to an electric car. Tax Planning The fuel benefit charge can be expensive. It may be cheaper for the employee to pay for all the fuel and to reclaim from the employer the cost of businessmiles driven in a company car based on a specific log of business journeys undertaken. HMRC publish advisory fuel rates for company cars which are updated on a quarterly basis. See gov.uk/ government/publications/advisory-fuel-rates for the latest position or contact us. Medical insurance The employee is taxed on the amount of the premium paid by the employer. Home andmobile phones There is no benefit on the provision of a company mobile phone even where it is used privately. However, this is limited to one phone per employee. Where home telephone bills are paid by the employer, the amount paid will be taxable. The employee may make a tax deduction claim for the cost of business calls only but not the line rental.
In addition, the government has reduced the percentages which apply to lower emissions cars and introduced performance-related bands for hybrid vehicles with emissions up to 50 g/km depending on how far the hybrid vehicle can travel under electric power.
Cars registered after 5.4.20 % of list price taxed
Cars registered before 6.4.20 % of list price taxed
2021/22
CO 2 emissions (g/km)
0
1
1
1 – 50 (split by zero-emission miles) >130 70-129
1 4 7
2
5 8
40-69 30-39 <30
11 13 14 15 16 17 18
12 14 15 16 17 18 19
51 – 54 55 – 59 60 – 64 65 - 69 70 - 74 75 - 79
19 20 For every additional 5g thereafter add 1% until the
maximum percentage of 37% is reached. For fully diesel cars generally add a 4%
Example David has a company car, a Hyundai Ioniq, which had a list price of £28,395 when it was provided new on 6 April 2020. The CO 2 emissions are 26 g/kmand its electric range is 39miles. David's benefit in kind for 2021/22 is £3,123, being £28,395 x 11%.
supplement (unless the car is registered on or after 1 September 2017 and meets the Euro 6d emissions standard) but the maximum is still 37%. For emissions over 75g/km if the CO 2 figure does not end in a 5 or a 0 round down to the nearest 5 or 0.
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