The Pre Budget Report And The Effects It Has On Private Fuel?

Company drivers that are currently using fuel cards are said to be taking a hit following the Pre Budget Report.

The Chancellor raised the fuel benefit multiplier meaning that now employees who are getting fuel paid for by the company for private use are far worse off.

The fuel benefit multiplier looks set to increase from £16,900 to £18,000 in early April 2010 and the van fuel benefit charge is set to from £500 to £550 at the same time. The chancellor called the case of company car drivers receiving free fuel a ‘’perverse environmental incentive’’.

By increasing the fuel benefit to £18,000 it makes the break even private mileage by 6.5% for an average 130g/km car.

An employee paying basic rate tax who is getting free private fuel based on the lower emitting car is said to have to travel more than 6,500 miles which are private for the tax cost of the benefit to actually be lower than the cost of fuel used.

Also the chancellor has confirmed that fuel prices are rising in April 2010 alongside fuel duty which is set to rise by 1p per litre every year until 2013.