IF YOU receive free fuel from your employer to use a van other than for work, such as private use for leisure time, 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.
The Chancellor confirmed in the Budget that the fuel benefit charge multiplier is to increase from £594 to £598.
So a 20% income tax payer will be charged 20% of £598 for free fuel, which is £120 per year; a 40% tax payer will pay £239 a year.
The van benefit-in-kind tax charge – the commercial vehicle equivalent of company car tax – will increase from April 6, 2016, from £3,150 in 2015/16 to £3,170 in 2016/17, raising annual tax payable by £4 to £634 for a 20% rate tax payer, the Budget confirmed. It will rise further by the rate of inflation from April 6, 2017.
The government is extending Van Benefit Charge support for zero-emission vans so that in 2016/17 and 2017/18 the charge will remain at 20% of the main rate, and will then increase on a tapered basis to April 5, 2022 – 40% in 2018/19, 60% in 2019/20, 80% in 2020/21, 90% in 2021/22 and then equalising with the standard charge in 2022/23 – a two-year extension from the original timetable.
The government says it will review the impact of the incentive at Budget 2018 together with enhanced capital allowances for zero-emission vans.
In 2015/16 the rate for electric vans was 20% of that applied to conventionally fuelled vans and the rate had been expected to rise to 40% in 2016/17, 60% in 2017/18, 80% in 2018/19 and 90% in 2019/20 with the rates equalised in 2020/21.