What type of expenses are normally payable in respect of car travel?

If a car is provided by your employer, it is usual for them to reimburse expenses in connection with your employment. This would include:

  • fuel;
  • road tax;
  • insurance; and
  • maintenance costs.

HM Revenue and Customs counts the provision of a company car as a benefit in kind, regarded as part of an employee's taxable income.

It is normal for the employee to fund his or her own fuel costs for private mileage. If your employer pays for fuel for any private mileage, this is a benefit in kind and forms part of your taxable income. If you use your own vehicle on business, you can be reimbursed up to a set limit per mile without the payment becoming taxable.

Note: This content is provided as general background information and should not be taken as legal advice or financial advice for your particular situation. Make sure to get individual advice on your case from your union, a source on our free help page or an independent financial advisor before taking any action.

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