Are You Better With Or Without Fuel Benefit-In-Kind?
Unfortunately there are only a couple of guarantees in life; one of those being taxes... including tax on vehicles. Even if employees are given company cars as a benefit, there are still costs attached.
When a company car is issued to an employee, the individual will most likely receive ‘free fuel’ from the employer and will be taxed, each tax year, on the cash equivalent of the fuel benefit. This is called Fuel Benefit-In-Kind (FBIK) and the costs can become quite hefty!
But don’t worry, ABAX are here to offer an alternative solution. If the employee pays for the fuel privately, both the employee and the company can save a significant amount of money. To do this, the employee will need to keep a personal mileage log – which is where ABAX’s Triplog comes in! Triplog works by automatically logging all driving via GPS, producing an accurate, digital business mileage log that follows recommendations set out by the HMRC.
To show you just how much money can be saved, let’s look a real life example. Imagine an employee is issued with a BMW 5 series:
Cost of car: £38,620
FBIK 2018/19: 27%
Fuel cost / L: 1.23
Total salary: £45,000
Private mileage: 10,000
Using ABAX’s savings calculator, it was calculated that FBIK tax on this BMW would be £2,527 for the employee. Whereas, by using Triplog and paying fuel privately, the cost was just £880. This isn’t forgetting the savings the company will receive such as Road Fuel Scale Charge and NIC against fuel benefit – which was calculated at £950.
This would make a total saving of £3257 for both the employee AND the company!
Don’t quite believe the savings?
Use the Fuel Benefit calculator yourself here.