Company Car Tax Guide

Employers Who Require Employees to Repay the Cost of Fuel Used for Private Travel

Providing that all of the miles of private travel have been properly identified, we will accept that there is no fuel benefit charge, and therefore no Class 1A NICs liability, where the employer uses the appropriate rate from the table below (or any higher rate) to work out the cost of fuel used for private travel that the employee must repay to the employer. Again, this reflects the fact that they are intended to reflect actual average fuel costs.

Even if it seems that the actual cost of the fuel could be more than the current advisory fuel rate, it is only in exceptional cases that we will consider arguing that a higher repayment rate should apply. For example, where the employee drives a very large-engined company car that achieves fewer than 16 or 17 miles to the gallon. But we will always accept that the guideline rates can be used to calculate the amount that the employee must make good where the engine size is 3 litres or less.

The advisory rates will not be binding where an employer can demonstrate that employees cover the full cost of private fuel by repaying at a lower rate per mile.