Speaking at Hit for Six, Deloitte and Touche senior manager David Rawlings said he knew of one company that provided the perk to 800 drivers at a cost of £1 million but that the benefit to the drivers was negligible.
Company car drivers who receive free fuel for private mileage pay tax on a percentage of a set value, currently £14,400, using the same scale on which company car tax is based. But the cost of tax is often much more than the value of the fuel drivers are using. Furthermore, employers are also paying tax on the benefit they are giving drivers, as well.
So for a driver covering 8,000 miles in a car with CO2 emissions of 165g/km that achieves 33mpg, 'free' fuel would actually cost the driver £109 and the employer £683 to provide it for the tax year to the end of April.
Rawlings added: 'It's a waste of money and basically means the same fuel is paid for twice. If any fleet is still offering free fuel they should look at it immediately.'