Fleet News

Brown's five-year plan to end free fuel benefit

THE Government is looking to end over the next five years any benefit which company car drivers gain by receiving free fuel for private motoring. Around 810,000 company car drivers will suffer the impact of Chancellor Gordon Brown's sharp increases in the fixed fuel scale charges which are used to calculate the benefit-in-kind tax payable by drivers who enjoy free fuel for private motoring.

Simultaneously he has brought diesel scale charges into line with those for petrol. An official Treasury statement said: 'The Chancellor's intention is to discourage employers from providing and employees from accepting free fuel so that more company car drivers face the full cost of the fuel they use for private motoring. This should result in fewer private miles being driven and lower carbon dioxide emissions.'

As a result, the scale charges for free petrol provided for private use will rise by 20% year-on-year until over and above the usual increases which already take into account increases in pump prices and fuel duty. The Inland Revenue will alter PAYE codes in May to collect the additional tax payable, and neither company car drivers nor their employers have to take any action. The Revenue says the measure will raise £505 million over the next three years.

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