Fuel benefit charge multiplier increases to £550
IF YOU provide your van or pick-up drivers with free fuel for private use, or you receive free fuel from your employer, then the cost of the benefit is rising.
Staff receiving company-funded fuel used privately will see their benefit-in-kind tax bills rise from April 6. And with National Insurance rates rising to 13.8% in 2011, companies will pay more on the employee provided benefit, too.
The Chancellor confirmed in the Budget that the fuel benefit charge multiplier is to increase from £500 to £550.
So a 20% income tax payer will be charged 20% of £550 for free fuel, which is £110 per year; a 40% tax payer will pay £220 a year.
National Insurance rate rises
The Chancellor reconfirmed that employee and employer National Insurances rates will rise by 1% from April 6, 2011. That means that employees will pay 12% on earnings. Employers will see their NICs rise from 12.8% to 13.8% including those paid on benefits-in-kind such as company-funded fuel used privately.