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 2023/24 is set at £27,800. 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 business miles 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. Click here for the latest position or contact us. Vans Where employees are provided with a van and the only private use of this is to travel to and from work (including any incidental private use), then no taxable benefit should arise. If there is private use beyond this, there is a benefit of £3,960 for 2023/24 and an additional £757 if fuel is provided for private as well as business journeys. In order to avoid this charge, it is advisable to have a formal written policy, detailed mileage logs and make use of vehicle tracker records. These will support the limited private use of the van and may avoid problems with HMRC in the future.
Medical insurance The employee is taxed on the amount of the premium paid by the employer. Home and mobile 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. Cheap or interest free loans If loans made by the employer to an employee exceed £10,000 at any point in a tax year, tax is chargeable on the difference between the interest paid and the interest due at an official rate - currently set at
2.25% per annum. An exception applies for certain qualifying loans - please contact us for information. Tax Tip The £10,000 limit on tax free loans is an attractive perk for many employees. Childcare costs Childcare costs paid for by an employer may be exempt from both income tax and NICs. This applies to a place in an employer operated nursery and to Employer Supported Childcare as long as the claimant entered the Scheme before 4 October 2018. In the latter case, the exemption is limited and excess amounts are subject to tax and NICs. Employer Supported Childcare is now closed to new claimants and has been replaced by Tax-Free Childcare.
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Working For Others
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