Budget 2014 Report: Fuel & Company-Funded Private Fuel

No rise in fuel duty until next election but Company Car Drivers receiving private fuel benefit will receive higher BIK bills

It was news that we all wanted to hear - well, of course, we would all like to see fuel prices lowered but in the recent 2014 Budget announcement, the Chancellor of the Exchequer confirmed that there will not be a rise in fuel duty any time before the next general election. This means that the previously announced 1.6 pence per litre rise in duty has been scrapped. 

In addition, additional legislation will come into place as part of the Finance Bill 2015 which will mean a reduced rate of methanol composed fuel duties (95% pure methanol, 5% water); this will apply from 1st April 2015. Methanol fuel duty will be 9.32 pence per litre and the differential between the main fuel rate and the methanol one will stay in place until 2024. 

It is planned that in the 2018 Budget, the Government will review the effects of the incentive along with the fuel duty incentives for fuel gases.

Car fuel benefit charge 2014/15

There is bad news for employees who have company-funded fuel benefit for private use, as their benefit in kind (BIK) bills are likely to increase. 

There will be a fuel benefit charge multiplier for company cars from 6th April this year; the increase will go from £21,100 in 2013/14 up to £21,700 for 2014/15. In addition, from 6th April next year (2015), the multiplier will increase in line with RPI (inflation).

Van fuel benefit charge 2014/15

For van drivers, from 6th April this year 2014 multiplier will also increase, this time from £564 to £581.

Summary 

Well the no-rise in fuel duty will certainly please would-be voters in the run up to the next election; this topic is a make-or-break one for sure and it is an issue that is close to many people's hearts. 

However, it does seem that the coffers will be topped-up by penalising the company car driver as far as fuel benefit charges go. Company car drivers vote, too, but of course, there aren't as many would-be voters as there are individuals who own their own cars. 

Looking at our first report, with the squeeze getting even tighter on environmentally-friendly cars company cars, it does seem that the increase in revenue for the Government in this year's budget is certainly leaning quite heavily on the company car.


Written by @MotorMistress
Share: