Company car tax explained - Advised mileage rates

Company car drivers and drivers who use their personal cars for company work will usually be reimbursed on a mileage rate.

Company car drivers will usually get a rate that reflects fuel costs, while those who use a personal car for company business should be covered for all costs associated with running the car, from general wear and tear to insurance charges and tax costs.
As long as the paid rates meet HM Revenue & Customs' published advisory fuel rates for company cars (which can be found by clicking here) then there are no tax implications. The rates are scaled according to the engine size of your car.

However, if the rate your company pays you is higher than the advised rates, then your company must justify this fact to HM Revenue & Customs.

Acceptable circumstances would be, for instance, if your job required you to use a 4x4 because you work on the land.

If, however, your company is unable to justify why it is paying you a higher fuel rate, then you will be liable to pay tax on anything you receive above the approved rate.