Car Fuel Benefit Calculator United Kingdom

Free private fuel in a company car is one of the few perks where the tax can easily exceed the value of what is being taxed. For your car and mileage, this calculator works out the fuel benefit charge, the Income Tax you pay on it, the employer’s Class 1A National Insurance and the private mileage you would need to drive before the arrangement pays for itself.

How the car fuel benefit calculator works out the charge

The charge does not depend on what you burned. HMRC sets one fixed multiplier for the whole country each tax year (£29,200 for 2026/27) and multiplies it by your car’s appropriate percentage, the same percentage that sets your company car benefit. That percentage is driven by CO2 emissions, or by electric range for a plug-in hybrid emitting between 1 and 50 g/km.

A petrol car emitting 120 g/km has an appropriate percentage of 30%, so its fuel benefit charge is 30% of £29,200, or £8,760. That figure is added to your income and taxed at your marginal rate of 20%, 40% or 45%. Your fuel economy, your mileage and the price of petrol play no part. Whether you drive 500 private miles a year or 15,000, the charge is the same, so two colleagues with the same car pay the same tax even if one barely uses it privately and the other drives it across Europe every summer.

The break-even mileage is the number that matters

Because the charge is fixed and your fuel cost is not, there is a mileage at which the two cross. Below it you pay more in tax than the fuel is worth and would do better buying your own; above it the perk pays.

The calculator finds that point from your fuel economy and the pump price. It converts miles per gallon into a cost per mile, then divides your tax bill by that figure. In the example above, a 40 mpg car with petrol at £1.40 a litre costs about 16p a mile to run. A basic rate taxpayer pays £1,752 of tax on the £8,760 charge and needs about 11,000 private miles to break even. A higher rate taxpayer pays £3,504 and needs about 22,000, because the tax doubles while the fuel cost does not.

A less efficient car costs more per mile, which brings the break-even mileage down: thirsty cars make free fuel more valuable. A higher marginal rate pushes it up. A high-emitting car raises the appropriate percentage too, so the tax rises along with the fuel cost.

Enter your mileage honestly. Commuting to a permanent workplace counts as private mileage, and it is usually the largest part. Genuine business travel is not part of this calculation.

Reimbursing your employer is all or nothing

You can remove the charge entirely by repaying your employer the full cost of all private fuel provided in the tax year, by the statutory deadline. Do that and the charge is nil.

A partial contribution does nothing. With the company car benefit, payments for private use reduce the taxable figure pound for pound, but the fuel benefit charge is unaffected by anything short of full reimbursement. Paying half the cost of your private fuel leaves you with the same tax bill as paying nothing, and you are out of pocket by the amount you paid. If you reimburse, reimburse in full and keep mileage records to prove it.

Most employers now do the opposite: you pay for all fuel yourself and claim back business mileage at the advisory fuel rates, which are tax-free within the published limits.

Part-year arrangements and electric cars

The charge is reduced proportionately for complete months in which private fuel was not available, so a fuel card issued halfway through the year gives half a year’s charge. Set the months field to match. If the benefit is withdrawn and then reinstated in the same tax year, the reduction is lost and the full-year charge applies, so stopping a fuel card in June and restarting it in November is the worst of both worlds.

Electric company cars fall outside this charge. Electricity is not a fuel for these purposes, so an employer paying for charging does not trigger a fuel benefit. Together with the low appropriate percentage on electric cars (4% for 2026/27), this is a large part of why electric company cars have become so much more attractive than petrol or diesel ones.

The employer side

Your employer pays Class 1A National Insurance at 15% on the same fuel benefit charge, reported on the P11D each year; on an £8,760 charge that is £1,314. It is a real cost for a benefit many employees would be better off without, which is why fuel cards for private use have disappeared from most benefits packages in favour of business mileage claims.

If an offer includes free fuel, run the numbers first. It is reasonable to ask for the fuel benefit to be dropped in exchange for something else, and both sides often come out ahead.

Before you decide

The tool estimates one year at a steady salary with one car. It does not model vans, which have their own fuel benefit charge, cars shared between employees, or the effect of the benefit on your adjusted net income for the High Income Child Benefit Charge, though it does apply the personal allowance taper to the tax itself. Figures are estimates based on published HMRC rates, not a P11D calculation. Check anything you plan to act on with your payroll department or a qualified adviser. This is information, not financial advice.

About This Car Fuel Benefit Calculator

Use this car fuel benefit calculator to get an instant, accurate estimate. The figures follow official GOV.UK guidance and every rate and threshold is kept up to date for 2026. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.