Car and Fuel Benefits – General Print
The above benefits apply to all employees.
Authorised employers no longer have to complete forms P11D to report benefits to HMRC, but will report and deduct tax on benefits-in-kind through the payroll. Qualifying business expenses are exempt from payrolling.
The car benefit is reduced by £1 for each £1 the employee contributes towards his use of the car. However, this is not tax efficient as the employee is contributing out of taxed income. Similarly an employee may make a one-off contribution towards the cost of buying the car. Such a contribution of up to £5,000 will reduce the value of the cost of the car when new, and therefore the taxable benefit. This is also unlikely to be tax efficient unless the employee uses the car for several years.