Fuel Card Benefits in Kind

Fuel Card Benefits in Kind

Fuel cards are convenient for you and your drivers, but understanding the tax for fuel and car benefits can be complicated. Learn more about fuel card benefits in kind.

The first thing you need to establish is whether your employees are going to use the vehicles for private use. Put simply, will they drive the vehicles home at the end of the day? If so, and they earn over £8,500 per year, they will need to pay tax on the vehicle and possibly the fuel too, and you will need to submit the paperwork for this.

Benefits in kind for fuel cards can be claimed on the P11D expenses and benefits form. If your employees use a fuel card but contribute to the private element themselves (i.e., pay for their own fuel when not working) they shouldn’t be taxed on this. However, any fuel paid for on the card which they then use for non-work purposes can be taxed.

When completing the benefits form you will need to factor in information such as the CO2 output of the vehicles, as this effects how much tax is paid, as does the type of fuel used.

Working out fuel card benefits in kind for your employees really depends on how much you permit them to use the vehicles privately. While it might seem to your employees like a good deal to let you pay for all their fuel, explaining to them that they will be taxed might change their minds, so it might be more cost-effective for everyone if you only pay for work fuel.

However this is something you need to decide based upon your workforce and their needs.