Expenses and benefits: company cars and fuel
What to report and pay
If the cars you provide are not exempt, you must report them to HM Revenue and Customs (HMRC), and you may have to pay National Insurance on the value of the benefit.
Cars for private use
You’ll need to report this to HMRC separately.
At the end of the tax year, you’ll also need to:
- report on form P11D
- pay Class 1A National Insurance on the value of the car benefit
See HMRC’s guidance on car and car fuel benefit for full details of the rules and when they apply.
Fuel for private use
If your employee does not pay you back for the fuel they use privately during the tax year, you’ll need to:
- report on form P11D
- pay Class 1A National Insurance on the value of the fuel benefit
Fuel for volunteer work
You can pay or refund the fuel costs (using the Advisory Fuel Rates) of your employees doing volunteer work.
This is a benefit and you’ll need to either:
- report on form P11D
- report through a PAYE Settlement Agreement if you wish to pay tax and National Insurance contributions on your employee’s behalf
Company cars for employees working from home during coronavirus (COVID-19)
If you provided an employee with a company car while they were furloughed or working from home due to COVID-19 this is considered a non-cash benefit (‘benefit in kind’).
Until 30 days after they return the keys, you’ll need to report on form P11D.
Keeping records
You must keep records of all your employees’ expenses and benefits.
You should keep a record of the car’s list price - you’ll need this when you work out the value of the benefit.