If you, or any of your employees, have the benefit of private fuel in a company car you have a couple of months to save yourself what could easily be thousands of pounds.
The tax charge on private fuel is fixed, based on the car’s CO2 and potentially engine type. As an example for a BMW 320D a 40% taxpayer will pay £2,646 in 2020/21 regardless of how many private miles they’ve actually driven. At £1.20 a litre and (say) 50mpg that would pay for 24,252 private miles.
If you were to do just 5,000 private miles in that 320d, it would only cost you £545, saving £2,101 compared to the tax charge.
With COVID-19, private miles for many have simply collapsed. Personally, I’ve done less than 2,000 private miles since last April….
You can save the tax (and associated employer’s NIC charge) if you repay the full cost of the private fuel by 6th July. For almost everyone who has the private fuel “benefit”, this is a no-brainer.
You need to make sure it really is all your private miles, including any commuting miles in a company car.