{"id":6745,"date":"2025-12-11T10:55:49","date_gmt":"2025-12-11T10:55:49","guid":{"rendered":"https:\/\/www.bainesjewitt.co.uk\/blog\/?p=6745"},"modified":"2025-12-11T10:55:51","modified_gmt":"2025-12-11T10:55:51","slug":"car-fuel-benefit-multiplier-increase-what-businesses-need-to-know","status":"publish","type":"post","link":"https:\/\/www.bainesjewitt.co.uk\/blog\/car-fuel-benefit-multiplier-increase-what-businesses-need-to-know\/","title":{"rendered":"Car fuel benefit multiplier increase: What businesses need to know"},"content":{"rendered":"<p>From April 2026, the cost of providing fuel with company cars and vans is rising again.<\/p>\n<p><!--more--><\/p>\n<p>HMRC has confirmed that car and van fuel benefit charges will increase in line with inflation for the 2026\/27 tax year, pushing the car fuel benefit multiplier up to \u00a329,200.<\/p>\n<p>If your business provides fuel for private use in company vehicles, this change will directly affect both your employees\u2019 Income Tax bills and your Employer National Insurance costs.<\/p>\n<h3><strong>What is the car fuel benefit multiplier?<\/strong><\/h3>\n<p>The car fuel benefit multiplier is a fixed figure set by HMRC that is used to calculate the taxable value of fuel provided by an employer for private travel in a company car.<\/p>\n<p>The calculation works as follows:<\/p>\n<ul>\n<li>Take the car fuel benefit multiplier<\/li>\n<li>Multiply it by the relevant CO\u2082 emissions percentage of the vehicle<\/li>\n<li>The result is the cash equivalent of the fuel benefit<\/li>\n<\/ul>\n<p>That cash equivalent is then treated as a benefit in kind. The employee pays Income Tax on it and the employer pays Class 1A National Insurance Contributions (NICs).<\/p>\n<p>Importantly, the multiplier applies regardless of how much private fuel is actually used.<\/p>\n<h3><strong>What is changing from April 2026?<\/strong><\/h3>\n<p>HMRC has confirmed that the rates will rise in line with the Consumer Price Index, based on the September 2025 figure.<\/p>\n<p>The updated figures are:<\/p>\n<ul>\n<li>Car fuel benefit multiplier: \u00a329,200 for 2026\/27 (up from \u00a328,200 in 2025\/26)<\/li>\n<li>Flat-rate van benefit charge: \u00a34,170 (up from \u00a34,020)<\/li>\n<li>Van fuel benefit charge: \u00a3798 (up from \u00a3769)<\/li>\n<\/ul>\n<p>These increases affect employers that provide:<\/p>\n<ul>\n<li>Company cars with fuel paid for private use<\/li>\n<li>Company vans available for private use<\/li>\n<li>Fuel for private mileage in company vans<\/li>\n<\/ul>\n<h3><strong>How this impacts businesses and employees<\/strong><\/h3>\n<p>For employees, the rise means a higher taxable benefit, even though the increase is driven by inflation rather than changes to vehicle use.<\/p>\n<p>For higher emission cars in particular, the tax cost of \u201cfree\u201d fuel can be surprisingly high.<\/p>\n<p>For employers, higher benefit values mean increased Class 1A NIC costs. This can add up quickly across a fleet, especially where fuel benefits are offered as standard rather than by exception.<\/p>\n<p>In some cases, reimbursing business mileage only can be more tax-efficient for both employer and employee.<\/p>\n<h3><strong>A good time to review your approach<\/strong><\/h3>\n<p>Understanding how the car fuel benefit multiplier works and how the new rates affect your business can help you avoid unnecessary tax costs and surprises down the line.<\/p>\n<p>If you would like to review how these changes affect your specific arrangements, speaking to your accountant sooner rather than later can help you plan ahead of the new tax year.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>From April 2026, the cost of providing fuel with company cars and vans is rising again.<\/p>\n","protected":false},"author":2,"featured_media":6748,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24,125],"tags":[],"_links":{"self":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/6745"}],"collection":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=6745"}],"version-history":[{"count":1,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/6745\/revisions"}],"predecessor-version":[{"id":6746,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/6745\/revisions\/6746"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/media\/6748"}],"wp:attachment":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=6745"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=6745"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=6745"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}