Fuel ― company vans

By Tolley in association with Philip Rutherford
Employment_tax_img2

The following Employment Tax guidance note by Tolley in association with Philip Rutherford provides comprehensive and up to date tax information covering:

  • Fuel ― company vans
  • Introduction
  • Fuel for company vans
  • Reporting the benefit
  • Salary sacrifice and similar arrangements

Introduction

In addition to providing a company van, there is a possibility that an employer will also provide a private fuel benefit in relation to the van.

ITEPA 2003, ss 160–164

For consideration of the tax consequences arising from the provision of a van benefit, please refer to the Company vans guidance note.

Fuel for company vans

If the provision of the van itself is exempt then no fuel benefit arises. A van benefit only arises where the employee enjoys more than insignificant private use or where the private use of the van is unrestricted. Therefore, a van fuel benefit will follow on from the van benefit. Details of these key issues can be found in the Company vans guidance note.

For example, if a postal worker is provided with a van on which no taxable benefit arises because he has met one of the exemptions within the van benefit provisions, he will not have a fuel benefit in respect of that van.

HMRC guidance is at EIM22900 onwards.

It is when a private benefit has arisen on a van that the employer has to think about how the fuel relating to that private element has been funded. In order for the employee to escape a fuel benefit charge, they would need to be able to demonstrate that they had made good any amounts which relate to private mileage. In reality, the amount of the van fuel benefit charge is quite low when compared with the car fuel benefit charge and is one which may be accepted more readily by employees.

Similarities to the car fuel benefit

If fuel is only p

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