Fuel Benefit - It's not always a Benefit

Honest John Back Room » Motoring discussion
View Threaded
Tue 12 Jul 2016 17:33
Fuel Benefit - It's not always a Benefit - TheBroker

As we do alot of work with companies supplying company cars to employees, the question of Fuel Benefit comes up alot.

Often it is perceived as preferable for a company to supply the employee with a fully expenced car (i.e. all personal mileage paid for by the company too).

Many are surprised to learn that unless the driver is doing (as a general rule of thumb) over 10,000 personal miles per annum (often it needs to be more), the employee is paying over the odds for their fuel by between 2x and 3x the pence per litre cost. Put simply, they are throwing money away.

There are of course exceptions to the rule, and some employees commuting from afar into the office but overall it is often cheaper for an employee to not accept a fully expensed car and they should certaily do some sums (albeit not easy ones) first.

Reply | Report as offensive | Link
Tue 12 Jul 2016 20:52
Fuel Benefit - It's not always a Benefit - NARU

Yes, its been that way for a while, but you're right to point it out. The fuel benefit was great when I drove a 3.0 petrol with a long commute. And also with the Saab 9-5 Aero that replaced it.

Not so much when I switched to a sensible diesel.

Reply | Report as offensive | Link
Tue 12 Jul 2016 23:34
Fuel Benefit - It's not always a Benefit - Smileyman

In the vast majority of cases the only benefit is in favour of the tax collector. Only really suitable for the high mileage private use driver or lazy driver who won't keep mileage logs and make sure no private mileage is paid for by employers

Reply | Report as offensive | Link
Wed 13 Jul 2016 15:41
Fuel Benefit - It's not always a Benefit - TheBroker

It is in the interest of both the employee and employer not to be lazy as both can save money unless its a high private mileage driver.

We wrote a full article on this matter to illustrate savings etc which you can read here: www.jks-fleet.co.uk/fuel-benefit-is-it-worth-it/

As a rough finger in the air, unless an employee is doing over 10,000 miles per year which are personal they are simply throwing money at the tax man, and none of us want to do that!

Reply | Report as offensive | Link
Wed 13 Jul 2016 22:46
Fuel Benefit - It's not always a Benefit - oldroverboy.

It is not only fuel benefit that is tricky.

swmbo is an nhs hospital doc and our local trust is trying to encourage people to use a salary sacrifice scheme, but as a higher rate taxpayer the sums don't quite add up. (saves them money) (but would prefer a manager to be employed for patient services,)

the penalties at the end of the lease are unattractive and as HMRC seem inclined to change the rules on salary sacrifice we will give it a miss.

It really is important to check what happens before during and afterwards, no just for the above schemes but even for Pcp. which from reading in the press will be the next "mis-selling scandal".

Reply | Report as offensive | Link
Thu 14 Jul 2016 03:11
Fuel Benefit - It's not always a Benefit - TheBroker
As with all options it is best to sit down and do the maths

RE PCP, if this does turn into the next scandal it will have been perpetuated by the predecessor to the FSA and the bedroom brokers who were unlicensed. Having always been properly licenced (old CCL) now FSA Authorised we have procedures in place to ensure mis-selling can't happen (ie our clients fully informed and all options explored).

Re end of lease penalties, the horror stories are now few and far between and should a funder (or collection agent) 'try it on' as a broker we wade in sharpish to resolve it. (Another reason to use a broker - we deal with all the hassle).
Reply | Report as offensive | Link

We give you the low down on how to save on insurance, little-known tricks and tips, what insurance groups mean and how to use insurance aggregators to beat insurers.

Insurance group finder and how to save on insurance