Company car fuel benefit (UK income tax)
If an employer provides fuel for private use in a company car, a separate fuel benefit generally arises unless the statutory conditions for no charge are met, including full making good of the private fuel cost. For a full year in 2025–26, the cash equivalent is £28,200 multiplied by the car’s appropriate percentage; period and other statutory adjustments may apply. A partial contribution does not simply reduce the fixed benefit proportionately.
Worked example
An employee has employer-provided private fuel throughout 2025–26 for a company car with an appropriate percentage of 20%, and does not make good the private fuel cost. Assuming no other adjustment, the fuel benefit is £28,200 × 20% = £5,640. This is separate from the car benefit and is not the tax payable.
Common mistake
Reducing the fuel benefit in proportion to a partial private-fuel reimbursement, or treating the fuel benefit as already included in the car benefit.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | TX (UK) | Supporting | June 2026–June 2027 |