Unless there is full reimbursement of fuel provided for the private use of a company car, there is a benefit in kind charge based on a fixed figure of £24,600, multiplied by the CO2 emissions percentage used to calculate the company car benefit for that vehicle.

For a high emission car that percentage can be as high as 37%, resulting in a benefit in kind charge of £9,102 and an income tax bill of £3,640.80 for a higher rate taxpayer. Even with current fuel prices, that would be a considerable amount of private mileage, so the employee should consider reimbursing the employer using the HMRC approved mileage rates by 5 July 2022 for 2021/22.