Fuel Benefit Print

The method of calculating the fuel benefit is also based on the amount of CO2 emissions produced by the particular car, and the same percentage used to determine the car scale charge is applied to a fixed amount, as determined by Treasury Order. This fixed amount is known as the “multiplier” and for 2020/21 this is £24,500.

The fuel benefit scale charge does not apply to the supply of electrical energy, or any energy for a car which cannot in any circumstances emit CO2 by being driven.

The fuel benefits taxable for 2020/21 are within the range £490 to £9,065, as follows:

Percentage of list price taxable Taxable Benefit,  £ Percentage of list price taxable Taxable Benefit, £
2% 490 22% 5,390
3 735 23 5,635
5 1,225 24 5,880
6 1,470 25 6,125
8 1,960 26 6,370
10 2,450 27 6,615
12 2,940 28 6,860
13 3,185 29 7,105
14 3,430 30 7,350
15 3,675 31 7,595
16 3,920 32 7,840
17 4,165 33 8,085
18 4,410 34 8,330
19 4,655 35 8,575
20 4,900 36 8,820
21 5,145 37 9,065

For 2021/22 the multiplier is being increased to £24,600 and the taxable fuel benefits are in the range £246 to £9,102, as follows:

Percentage of list price taxable Taxable Benefit,  £ Percentage of list price taxable Taxable Benefit, £
1% 246 21% 5,166
2 492 22 5,412
4 984 23 5,658
5 1,230 24 5,904
7 1,722 25 6,150
8 1,968 26 6,396
11 2,706 27 6,642
12 2,952 28 6,888
13 3,198 29 7,134
14 3,444 30 7,382
15 3,690 31 7,626
16 3,936 32 7,872
17 4,182 33 8,118
18 4,428 34 8,364
19 4,674 35 8,610
20 4,920 36 8,856
37 9,102

In many instances the tax on the fuel benefit will exceed the cost of private fuel provided by the employer, and this should be reviewed, and if necessary, all private fuel should be paid for personally so that the fuel scale charge will not be applied. A fuel benefit of £9,102 will cost a 45% taxpayer £4,096 in tax. At £1.30 per litre the tax payable would fund the purchase of around 693 gallons of fuel, and at 30 miles per gallon would require a private mileage in excess of 20,000 miles per annum for the fuel benefit to be advantageous. Where the car achieves only 20 miles per gallon it would still require over 13,000 miles of private motoring for the fuel charge to be beneficial.

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