The following Personal Tax guidance note by Tolley provides comprehensive and up to date tax information covering:
In addition to the benefit charge for the private use of company cars or company vans, if the employer pays for the employee’s private fuel, there will be a separate benefit assessed. If the employer only pays for fuel for business journeys, no benefit will arise.
ITEPA 2003, ss 290C–290E
If there is a taxable benefit, the cash equivalent depends on whether the fuel is provided in connection with a company car or company van. However, the rules on reimbursement of private fuel and reduction for unavailability of the vehicle / withdrawal of the fuel are the same for both.
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 forms 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 the employer, it is worth considering whether the disguised remuneration provisions in ITEPA 2003, Part 7A apply, as those rules have priority over most of the other rules for taxing employment income. If there is no third party, or one of the exemptions from ITEPA 2003, Part 7A applies, then the normal rules apply, as described below. The rules are discussed in detail in the Disguised remuneration ― overview guidance note.
Fuel for a company car
If an employee is provided with any fuel for private motoring in a company car (and the fuel is provided by reason of his employment, see the Employment income guidance note), the cash equivalent benefit is identified by using the formula below:
Fixed sum for the tax year x appropriate percentage = cash equivalent
The respective fixed sum for each tax year is:
Tax year Fixed sum 2019
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