Fleet News

Fleets get new warning on provision of free private fuel

FLEET operators are being advised to check carefully the viability of offering free fuel for employees’ private use.

A survey of more than 300 fleet decision-makers revealed that three quarters continue to offer fuel to company car drivers, despite numerous warnings by tax experts against such a practice.

Since the late 1990s the benefit-in- kind is no longer a perk because in the majority of cases drivers are likely to be paying more in tax than if they paid for fuel. In other cases, employers will be subsidising the fuel use of high private mileage drivers.

The survey was carried out by ALD Automotive. Deputy managing director Nigel Fletcher said: ‘Many company car drivers would be significantly better off if they opted out of the scheme and paid for fuel used privately out of their own pockets, but it does depend on individual circumstances.

‘Even though at face value the high cost of fuel may make the continuing receipt of company paid-for fuel used privately seem attractive, in reality only a small number of company car drivers are likely to benefit financially. There is still widespread misunderstanding.

‘Not only would individuals save money but companies would reduce the Class 1A National insurance contributions paid on benefits and save VAT on the scale charges as well as the cost of the fuel purchased.’

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