PTC

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Sorry another personal tax, can you explain why paying for private use petrol is a tax burden on a company? Also do all taxabled benefits need to be adjusted pro rata, so if someone started in dec 06 you would work out the benefits as 4/12 for the April 06/07 tax return?

Thanks

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PTC

    The private fuel element is a tax burden because the company incurs class 1A national insurance (which is a cost to them). There is also an issue concerning the scale charges. In order to re-claim the input VAT on the cost of the fuel the company has to pay over a scale charge for the privilege.

    Taxable benefits are pro-ratad from the date the benefit became available. So if a company car was made available to an employee on 1 December 2007 then the benefit would be calculated from 1 December 2007 up to 5th April 2008.

    Kind regards
    Steve
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PTC

    Thanks Steve that's really helpful. Sorry I duplicted myself above!!!!!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PTC

    Just had a thought, does the employee have to pay
    N I for all taxable benefits or just the private use petrol?
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PTC

    The only NI element is the class 1A on the employer's behalf - the employee's NI is not affected. The employee will have their tax code restricted for the value of any benefit in kind received - not just petrol.

    Kind regards
    Steve

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