Car Fuel Benefit Calculator UK 2026/27
Calculate the tax on employer-provided fuel for your company car. See if accepting free private fuel is worth it compared to paying yourself.
Found on V5C or manufacturer specs
BIK Rate
27%
Fuel Benefit Value
£7,506
Annual Tax on Fuel Benefit
£3,002
£250/month at 40% tax
Tax on Free Fuel
£3,002
Est. Private Fuel Cost
£1,364
You'd save ~£1639/year by paying for your own fuel
Based on estimated 7,000 private miles at 35mpg
Tip:If you drive few private miles, consider opting out of free fuel. You must pay for ALL private fuel yourself - partial reimbursement doesn't reduce the benefit.
Calculation Methodology
Fuel benefit = £27,800 × BIK rate. BIK rate determined by CO2 emissions with 4% diesel supplement (capped at 37%). Tax calculated at your marginal rate.
Official Sources
Important: Results are estimates based on standard HMRC rules. Your actual tax may differ based on your specific tax code, benefits, or HMRC adjustments. Always verify with your employer or a qualified accountant.
Frequently Asked Questions
What is the car fuel benefit?
The car fuel benefit is a taxable benefit that arises when your employer provides free fuel for private use in a company car. It's calculated using a fixed multiplier (£27,800 for 2026/27) multiplied by the car's BIK percentage rate, regardless of how much fuel you actually use.
How is the fuel benefit calculated?
The fuel benefit = £27,800 × car's BIK percentage. For example, a car with 27% BIK rate gives a fuel benefit of £7,506. You then pay tax at your marginal rate on this amount.
Is free fuel worth it for company car drivers?
It depends on your private mileage and tax rate. The fuel benefit is a flat charge regardless of usage. Higher rate taxpayers with low private mileage often pay more tax than they'd spend on fuel themselves. Calculate your actual private fuel costs to decide.
How can I avoid the fuel benefit charge?
You can avoid the charge by: 1) Paying for all private fuel yourself (keep detailed records), 2) Asking your employer to stop providing private fuel, 3) Reimbursing your employer for all private fuel by the end of the tax year. Partial reimbursement doesn't help - it's all or nothing.
Is fuel benefit reported on P11D?
Yes, if your employer provides private fuel, it's reported on form P11D section L. The benefit is added to your taxable income. Class 1A National Insurance (at 13.8%) is also payable by your employer on the fuel benefit.