VAT scale charge where fuel is used for private motoring

Most limited companies do not provide fuel for private use, as the tax charge is normally greater than the cost of the fuel. So the following applies more often to partnerships and sole traders, where there is an apportionment between business and private use.

VAT fuel scale charges, for taxing private use of road fuel, have been changed for periods commencing on or after 1 May 2013.

The scale charge for a particular vehicle is now determined by its CO2 emissions figure. Where the CO2 emissions figure of a vehicle is not a multiple of five, the figure is rounded down to the next multiple of five to determine the level of the charge. For a bi-fuel vehicle which has two CO2 emissions figures, the lower of the two figures should be used.

For cars which are too old to have a CO2 emissions figure HM Revenue & Customs (HMRC) have prescribed a level of emissions by reference to the vehicle’s engine capacity (cc) as follows:

  Cylinder   capacity            CO2 band
  1,400cc or less   140
  1,401cc to 2,000cc   175
  Over 2,000   225 or above

The HMRC website has details of the CO2 emissions amounts and the related fuel scale charges. The tables on the HMRC website show VAT inclusive scale charges applicable in each accounting period, depending on whether it is a 12 month, three month or one month accounting period.

National Minimum Wage from 1 October 2013

 

The National Minimum Wage rates are increasing from 1 October 2013. They will be:

 

•         Apprentice rates: £2.68 per hour. * But see note below.

•         Under 18s: £3.72 per hour.

•         18 to 20 years: £5.03 per hour.

•         Age 21 years and over: £6.31 per hour.

 

*This is the rate for apprentices under 19 years old or in their first year. Those 19 years or over and past the first year of apprenticeship should be paid at the rate applicable to their age.

Tax where cares are are used for business and private purposes

There are a number of situations where care needs to be taken in the way in which claims are made for the business use of a vehicle, usually a car,  that has duality of use – business and personal.

Here are some of the situations to be aware of.

 

1.    If you are self-employed and your business assets include a car, you should be reducing your claim for capital allowances and running costs based on your private use of the vehicle. The percentage added back should be based on documented evidence. This usually means keeping a mileage log for at least a part of the year.

2.    If you are employed and your employer requires that you use your own vehicle for business trips there are two aspects to consider: the rate per mile you are paid (HMRC allow you to receive up to 45p per mile for the first 10,000 business miles each tax year and 25p per mile thereafter); and, the number of miles you claim. The 45p/25p rate HMRC allow is a maximum as regards being non-taxable. Employers are free to pay up to this limit without triggering benefit-in-kind issues. Again journeys should be logged and recorded to evidence the number of miles claimed.

3.    If you have the use of a company car and your employer pays for your private petrol you will be liable to a hefty benefit-in-kind charge. In other words fuel for private use is a benefit you probably do not want – because the tax charge is so high. You can eliminate this charge if you reimburse your employer for the cost of private petrol provided. Unless you do an exceptionally high amount of private motoring, then the cost of reimbursing the employer for the fuel will be much less than the tax charge created by the benefit-in-kind assessment.

 

In examples 1 and 3 above you will need to record your private mileage of the vehicle, in example 2 your business mileage. In all three you will need to provide evidence should HMRC visit and select mileage claims for audit. Generally speaking you should:

 

•         Record the postcode at the beginning and end of the journey so an accurate check can be made of mileage claimed. London to Birmingham would be too vague.

•         The business miles claimed should not be rounded.

•         Home to work mileage should be excluded.

Tower to Tower Blackpool to Paris

The ride from Blackpool Tower to the Eiffel Tower is to start on Saturday July 20th from Blackpool arriving in Paris on Saturday 27th July. More details on http://www.justgiving.com/TowerToTowerOn2Wheels

Confirmed Route : (All Distances are approximate)

Day 1: Blackpool to Manchester – (51.46 miles)

Day 2: Manchester to Barlborough – (60.94 miles)

Day 3: Barlborough to Huntingdon – (94.5 miles)

Day 4: Huntingdon to Northfleet – (89.63 miles)

Day 5: Northfleet to Calais – (90.97 miles)

Day 6: Calais to Amiens – (100.69 miles)

Day 7 : Amiens to Chantilly (71.4 miles)

Day 8: Chantilly to the Eiffel Tower cia the Champs Elysee – (31.75 miles plus a celebration evening dinner cruise along the Seine)

 

This 30 mile section could have been tacked onto day 7. The idea is to arrive in Paris exhilarated and ready to party, not knackered and ready for bed !