Is it still worth getting ‘free fuel’ from your employer?

Since April 2003 there has been a fixed amount by which the appropriate car benefit percentage is multiplied to calculate car fuel benefit. As announced in the Pre Budget Report in October this fixed amount is set to rise for the first time from next month, going up from £14,400 to £16,900.

In last week’s Budget Alistair Darling also announced that the figure will now be increased annually at least in line with RPI changes apparently as an ‘incentive to drive fewer miles’.

Given the imminent changes almost every company car driver receiving the benefit of ‘free fuel’ for private journeys would be better off giving up this benefit and negotiating a salary increase instead.

If you are an employee or employer and would like further information regarding this issue please speak to your usual Hazlewoods tax contact or e-mail Kirsty Lightowlers kjl@hazlewoods.co.uk.