Question:
My company has a handful of company cars for the sales team. I would like them to pay for private mileage themselves when using the fuel cards so it's not shown as a benefit-in-kind. Can they make a ‘donation’ payment every month for their private mileage - maybe deduct (say) 35p from their expenses as they all keep mileage logs - or does this muddy the taxation waters for both the company and the individuals?
Arthur Weller replies:
There is no reduction in the car fuel charge for a contribution to the cost of fuel for private journeys. To escape the fuel charge an employee must reimburse the whole cost of private fuel to the employer, or pay for it himself in the first place. He should keep detailed records of both business and personal mileage to confirm that the amount reimbursed for private mileage is correct, remembering that travel between home and work is regarded as private mileage.
