Question:
We are looking to pay £2,800 for an employee’s fuel cost for commuting to the office. I know that there is Class 1A NIC payable of 13.8%, and that the figure has to be written in column ‘F’ of the P11D form. Could you let me know if there is any knock-on effect on the employee’s PAYE code? Also is any other tax payable by either employee or employer?
Arthur Weller replies:
Unfortunately, it is not clear whether we are dealing with a company car, or employee owned car, and if the latter, who contracted to pay for the fuel. If it is an employee car, then if the employee contracted to buy the fuel, but the employer pays the bill, then it is like salary and subject to tax and Class 1 NIC. If the employer contracted to buy the fuel, (e.g. the employer has an account at the garage or the employee uses a company credit card) then this is a benefit and subject to tax and Class 1A NIC.
