Fuel ― company vans

By Tolley in association with Philip Rutherford
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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. For consideration of the tax consequences arising from the provision of a van benefit, please refer to the Company vans guidance note.

ITEPA 2003, ss 160164

HMRC provides an Expenses and benefits from employment toolkit , which is a guide for employers and their advisers on the risks associated with the end of year form P11D . The toolkit is updated annually.

As with any other kind of employment reward, if the fuel is provided by a third party rather than by the employer, it is worth considering whether the disguised remuneration provisions in ITEPA 2003, ss 554A554Z21 (Pt 7A) apply, as those rules have priority over most of the other rules for taxing employment income. The rules are discussed in detail in the Disguised remuneration ― overview 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

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