Private Fuel Benefit Tax
Fuel scale charges and taxable benefit
You have to pay a separate tax charge on the benefit of free fuel provided for private miles in a company car.
Since April 2003 private fuel benefit tax has been based on CO2 emissions.
Calculating Tax on Free Fuel Benefit
To calculate the benefit charge on free fuel, the C02 percentage figure for your car should be multiplied against a set figure for the year. For 2008/9 this figure is £16,900.
Example calculation
The fuel scale charge (the value of benefit on which you pay tax) for a petrol car that has a CO2 emission of 195g/km:
£16,900 x 27% = £4,563
So, if you're a 40% tax-payer running a petrol car with a 195g/km CO2 emission, the calculation would be:
40% x £4,563 = £1,825
Therefore, you'd pay £1,825 in tax for the benefit of free fuel for private mileage in the tax year 2008–09.
Special Cases
The above applies to cars first registered after March 2001 and running on petrol or diesel. Different rules may apply to alternative fuel or hybrid cars, cars without an official CO2 figure and cars registered before 2001.
We recommend contacting HM Revenue & Customs for more specific advice about these special cases.
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22 January 2009