Budget 2011 – Company fuel benefit
With effect from 6 April 2011 employees and directors who are provided with a company car and who also receive free fuel will pay more tax. This is due to the announced increase in the set figure multiplier on company-provided fuel for company cars which is set to rise from £18,000 to £18,800.
The cash equivalent of the taxable benefit is determined by multiplying a set figure by an appropriate percentage for the car, based on its CO2 emissions (grams per kilometre). Basically the higher the CO2 rating of the car, the higher the appropriate percentage and the higher the tax charge for private fuel usage.