sempers

Anyone know / have experience of how tax works in this situation:

Car allowance (fixed) of x00ukp per month, no mileage rate. Fuel card provided for business and private use.

I own the car.

Thanks,
Mark.

Dunk

iTrader: (1)

The fixed monthly sum will be taxed at your marginal rate (i.e as additional salary). The fuel card will be taxed as normal as benefit in kind, be careful when you adopt it as you will incur a FULL years charge. (It is not pro-rated for the remainder of the tax year.)

D

sempers

How does the benefit in kind work? Is a particular value applied to the card, or do they account for the petrol I use?

I suppose at worst I'm paying 40% of my fuel bills - not so bad as I expect my private mileage to massively outweigh the business ones.

Dunk

iTrader: (1)

You will get a BIK if the company pays for any of your private mileage, the scale charge for 2002/03 is based on engine size
(see http://www.inlandrevenue.gov.uk/cars/fuel_benefit.htm)you'll then pay tax on these amounts.
Would you use (£2,850 * 40%(?))£1,140 of fuel privately before 5/4/03 ?

For 2003/04 the charge will be based on vehicle emissions
(see http://www.inlandrevenue.gov.uk/budget2002/revbn02.htm)

Other options are:

1) claim per mile for you business milage (& a refund from the IR if it's below the IR reimbursal rates)

2) You could however still get the fuel card and reimburse for all private fuel used, therefore no benefit in kind will arise.

D

P20SPD

iTrader: (1)

Dunk, quick question! Are you an accountant?

Dunk

iTrader: (1)

Sshhhhhh

P20SPD

iTrader: (1)

Yes or No?

Dunk

iTrader: (1)

If I confess, will I get thrown off the board for not being in IT ?

sempers

Ooh. Now that hadn't occurred to me! Ouch.

Company line is that they just put the balance of the account on your P11D, and you're taxed on that as additional salary (which sounds downright wrong!) I guess post 04/03, it'll be CO2 based.

Damn this is all too complicated!

Cheers for the advice,
Mark.

P20SPD

iTrader: (1)

Dunk, no you wont

Reason i ask is that i think you are wrong. AFAIK Tolleys tax library states taht you can not have a car fuel benefit when there is no company car benefit present.

Given that the car is owned personally, then there can be no company car benefit, hence no car fuel benefit.

Basically AFAIK the monthly allowance is taxed as additional salary, because thats all it is really (salary increase for not having a company car). The private element of of the fuel card, based on detailed mileage log, would be assessed as a benefit in kind.

This leaves you in a position to claim for business mileage based on the inland revenue approved rates for the Fixed Profit Car Scheme, less the amount that has been paid for business PETROL.

Not wishing to confuse things, but thats the way i understand it, and quite a few of my colleagues.

Dunk

iTrader: (1)

My understanding (& a quick call to the IR, for what's worth !!) is that the fuel scale charge is payable when a fuel BIK is received, regardless of whether it is a Co or private car. I know quite a few bods who get the flat scale charge, even though they run their own cars. It may be that you can opt between the actual method/FPCS & sclaed BIK. Mmmm got me thinking........

D

P20SPD

iTrader: (1)

Can you explain why i know of at least 3 clients that complete their own P11d's, and have had them returned/queried dut to a FSC being present with no Car benefit being present.

There were 3 seperate tax districts involved as well!

Will gladly be proven wrong (if i am)!

Dunk

iTrader: (1)

Probably queried it because they would anticipate that in 99% of cases fuel benefit will go with a Co car benefit, & therefore would suspect an ommission, rather than the 1% have fuel benefit but no co car.

P20SPD

iTrader: (1)

Nope, all three inspectors said it should have been on a different section of the P11D, not the CAR Benefits Section.

Dunk

iTrader: (1)

What was taxable FSC or actual ?

P20SPD

iTrader: (1)

actual personal fuel paid for buy the company fuel card.

consequently class 1a NIC was different as well!

Phil

IMHO

If the employee is receiving the IR scale rate ie pence per mile then it should not be incl on the P11d

However if you are receiving all the fuel paid for a private car then I believe it should be entered into box 1.23 of the P11d Travelling and Subsistance

Not a tax expert BTW

johnfelstead

OK, now i am completely confused.

I used to have a company car with fuel card that paid for all my petrol, company and private. I had a seriously crap tax code!

I opted out of the company car scheme, which means i run my own car but get a monthly car allowance, this is added to my monthly salary in a seperate entry on my payslip, but is taxed along with the rest of my salary. I also still have a fuel card, which pays for my business and private use.

How am i suposed to be taxed on this fuel card?

Also, i have just recieved tax returns forms for the last 2 years, i havent a clue where to start, never done one before. I pay higher rate tax and have a pension so i should be claiming back some tax for that i think? also can i claim back the cost of running the car against tax too?

Steve, fancy a client cos i havent got a clue. LOL

babber

If anyone on here is an accountant and wanted to help me with my tax problems I seriously like to take them up on it. I haven't done my self assessment yet, and did have a MY00 last year as a company car, and my tax code is really pants.

I'm also keen to find out if I can claim anything extra back, as I worked from home for three years, and was told that I could claim something ?

Email offline if you prefer, and I don't mind paying....If you can save me money then I don't mind handing some over

Cheers Phill C

P20SPD

iTrader: (1)

John no problem, give me a shout/drop me an email!

Babber same applies