Q. I am provided with a fuel card by my company for my private car that covers both business and private travel. What tax do I have to pay on this?

A. Usually when an employee is provided with fuel for private purposes they are taxed on having a fuel benefit in kind according to fuel scale rates which can be very expensive. However, this is only the case where a comp nay car is provided, not where you use your own private car. In this case the amount of the benefit will be the actual cost of the fuel provided for private use. To calculate this you should keep some form of mileage records to be able to calculate the amount attributable to the private fuel. If you were to make good the cost of this fuel to the company, then there would be no taxable benefit. Any benefit charged would be liable to tax and Class 1A National Insurance by your employer.

Q. I am resident in the UK but not domiciled in the UK. I have investments abroad that produce an annual income of approaching £10,000. Do I pay tax in the UK on this income?

A. Non-domiciles gain certain tax advantages one of which is that they pay tax on overseas income only when it is remitted to the UK. So if you have this investment held in a tax haven there will be no tax to pay at all unless you bring the income into the UK. No doubt you may however wish to use this income at some point and could for example do so on trips abroad. However, one great tip worth bearing in mind is that if the source of the income comes to an end in one tax year and the income is then remitted to the UK in a later tax year, tax is not payable. So by disposing of the investment you can avoid tax on the income altogether. By being a non-domicile you can also avoid inheritance tax on assets held outside UK, although the definition of a non-domicile is different for IHT purposes. Non-domiciles should obtain expert advice in their own circumstances.

Q. Our present accountant has advised us that no one should ever buy a car through their company because of the high tax rates now applicable to company cars. Is he right?

A. Whilst this is now the case in most circumstances, to strictly answer the question how you have phrased it, the answer is that he is wrong. For example, the tax rates associated with some cars are as low as 15% of the list price if they have low CO2 emissions. The problem is that you may not want a car like this. However, do remember that car is still likely to be taxed on you if the company car is provided to a member of your household by virtue of your employment, perhaps your son or daughter who has just passed their driving test. Your company will get tax relief for the capital allowances on the cost of the car and the running expenses. As such if you were going to buy them a car out of your taxed wages, you may well find it is cheaper to do it through the company. In every case with cars and fuel there is no right answer without crunching the numbers to find out.

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