HMRC will be increasing the van benefit and car fuel benefit charge from the 6 April 2023. The adjustments are in line with the consumer price index and have happened each tax year since 2014.
If you are going to receive either a van or car fuel benefit charge in the 2023/2024 tax year you will be paying more tax in comparison to the previous tax year.
It’s best to be aware of the tax increase now so you can prepare your budget from April 2023.
11% Van Benefit Charge rise from April 2023
The flat rate van benefit charge will go up to £3960 per tax year from £3600 in the 2022-2023 tax year.
If you are a basic rate taxpayer paying tax at a rate of 20% you will be paying around £72 more in income tax because of the increase.
For higher rate taxpayers the rise will be at 40% taking your van benefit charge cost to around £144 more per year.
10.03% Flat Rate Van Fuel Benefit Charge rise from April 2023
For company van users a £69 increase in flat rate van fuel benefit charge is being applied taking it to £757 from the previous years £688.
The van fuel benefit charge is in addition to the van benefit charge and is only for individuals who don’t pay for their own fuel when using their company van for private use.
9.89% Car Fuel Benefit Charge rise from April 2023
The car fuel benefit charge is going up because the multiplier is increasing to £27,800 which is an increase of £2500 from £25,300.
The car fuel benefit multiplier is used to calculate the fuel benefit charge and your tax bill will go up when the government increase it.
2023/2024 tax year changes
It’s quite likely that the 2023/2024 car and van fuel benefit tax charges in many cases will be more than an individuals rise in pay which in the current cost of living crisis isn’t something to be relished.
If you stop receiving a car or van fuel benefit during a tax year it’s important to make sure HMRC are notified by your employer so you don’t keep paying tax on a company benefit you are no longer receiving.
It’s recommended that you check your new tax code for the 23/24 tax year to make sure it is correct for you and reflects an accurate car or van fuel benefit charge.
Our tax code guide is here to help you check your tax code and find out what to do if you think it might be inaccurate.
You can log on to your personal tax account or the HMRC app to find out your new 23/24 tax year tax code and find ways to change your tax code if you need to.
