Reducing fuel benefit for employees P11d

Can someone please explain what the rules are re reducing fuel benefit. For 2009/10 I entered on an employees P11d that they had a company car and fuel paid etc and they were taxed quite accordingly. It has since been mentioned to me that if the person in question contributes an advisory fuel rate amount he will not have to pay the tax on fuel on P11d. I am now confused, can anyone clarify in detail how it work. I thought that regardless on how much you contribute personally to fuel you get taxed on all of it.


  • jenny3549
    jenny3549 Registered Posts: 472
    If the fuel is provided for personal use rather than just business then it doesn't matter if the employee makes a contribution - they still pay the tax on the set amount. It would only make a difference if they repaid ALL private fuel so that only the business amount were paid by the company - at that point there is no taxable benefit for fuel.
  • noodles
    noodles Registered Posts: 308
    But how do you know what the private element is to know whether it is repaid or not, is it just a mileage log. Also, does all the actual fuel bills go onto the ltd company accounts. This is just a small family ltd company and all fuel bills been in accounts so far and vat claimed on these. I am just slightly confused as to why they will get out of paying tax on this when they clearly are using it for private use.
  • A-Vic
    A-Vic Registered Posts: 6,970
    they wont get away with private use they have to pay the tax on in on their p11
  • noodles
    noodles Registered Posts: 308
    I have been told by another accountant advising them!! to go to benefits hmrc doc and under 13.5 reducing fuel benefit charges to nil. I think that they can probably get away with not paying tax but need to understand why, it just does not seem right and HMRC just keeps refering me to benefits 408 section 13 - help!!
  • burg
    burg Moderator, FMAAT, AAT Licensed Accountant Posts: 1,441
    A previously pointed out.

    You cannot reduce a fuel benefit partially you either pay it or you don't. This depends if the company pays for any fuel that is used for private use. The employee either needs to pay for all private fuel from their own funds or they need to keep a mileage log and reimburse the company for ALL private fuel. If there is even so much as a penny of private fuel then the FULL fuel benefit is chargeable!

  • noodles
    noodles Registered Posts: 308
    okay so my next question is
    1 - Would all fuel receipts go in business and vat get claimed
    2 - Is it acceptable that I just put through 16p per mile for private usage as per advisory rates. This is what I am being told to do???
  • blobbyh
    blobbyh Registered Posts: 2,415
    What's this?!!! A serious accounting thread on the Chat boards? "How very dare you". You need to go away and have a good thing about this nscuffell and contemplate your future amongst the riff raff.
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