Mileage on a company car

My employer provides me with a company car that is all declared on a P11D. However, they do not cover my fuel costs. Am I entitled to claim anything? 

1st August 2016

When it comes to company cars and fuel costs, there are essentially three different options:

  1. The employer covers all of the fuel costs, including private travel. The employee is therefore taxed on a fuel benefit charge, to account for the private fuel element that the employer is covering
  2. The employer covers all of the fuel costs, including private travel. The employee has to record their private mileage and reimburse their employer for it, using the company car advisory fuel rates
  3. The employee records all business miles and the employer reimburses the employee for them using the company car advisory fuel rates

Your situation sounds like the third scenario. Your employer is not obliged to reimburse you, in which case you are entitled to obtain tax relief for the expenditure either on your tax return or alternatively, using HM Revenue & Customs form P87.

Please note that due to the frequently changing fuel prices, HMRC regularly updates the advisory fuel rates, so always check their website for the latest figures here:

https://www.gov.uk/government/publications/advisory-fuel-rates

Please make sure you fully consider the other implications such as income tax, Corporation Tax, VAT and Class 1A National Insurance.

Your local TaxAssist Accountant would be happy to discuss this in more detail and calculate the differences between each option for you.

By Jo Nockels

Disclaimer: The information provided is based on current guidance (at date of publication) from HMRC and may be subject to change. Any advice shared here is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this information, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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