Employment Tax

Fuel ― company cars

Produced by Tolley in association with Philip Rutherford
  • 21 Dec 2021 16:40

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

  • Fuel ― company cars
  • Introduction
  • Employees chargeable to tax
  • Method of provision of fuel
  • Exceptions from the fuel benefit charge
  • Making good
  • Calculating the benefit
  • Reductions to the benefit
  • Reporting the benefit
  • NIC
  • More...

Fuel ― company cars


When an employer provides fuel for a company car, a taxable benefit is likely to arise. The taxable benefit is specifically known as the fuel benefit charge. The fuel benefit charge arises in addition to the company car taxable benefit, see the Company cars guidance note.

Detailed guidance on each of the following sections to cover specific circumstances is available at Simon’s Taxes E4.629 and from HMRC at EIM25500 onwards.

The definition of ‘provided’ stated in the legislation is very broad. Fuel is treated as having been provided if any of the following applies:

  1. any liability in respect of the provision of fuel for the car is paid directly by the employer (eg by settlement of an invoice)

  2. a non-cash voucher or credit token (such as a fuel card) is used to obtain fuel

  3. a non-cash voucher or credit token is used to obtain money to pay for fuel, or

  4. the employer reimburses the employee any sum for the cost of fuel

ITEPA 2003, s 149(3)

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 reporting and P11Ds. 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 554A–554Z21 (Pt 7A) apply, as those rules have priority over most of the other

Access this article and thousands of others like it
free for 7 days with a trial of TolleyGuidance.

Think Tax.
Think Tolley.

Critical, comprehensive and up-to-date tax information


Popular Articles

‘Bed and breakfasting’ with shares

‘Bed and breakfasting’ was the pre-1998 practice of selling shares and repurchasing them the following day. This technique can still be used in a modified form to achieve capital gains tax (CGT) savings for current or future tax years using:•a spouse / civil partner•a self-invested pension plan

04 Jan 2022 11:11 | Produced by Tolley Read more Read more

Isle of Man

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marked the end of the Brexit transition / implementation period entered into following the UK’s withdrawal from the EU. At this point in time, key transitional arrangements came to an end and significant changes began to take effect across the UK’s

30 Nov 2021 09:21 | Produced by Tolley Read more Read more

Partial exemption de minimis limit

This guidance note provides an overview of the partial exemption de minimis rules. This note should be read in conjunction with the Partial exemption overview guidance note. If a business incurs an insignificant amount of input tax which is associated with exempt supplies (exempt input tax), it may

19 Oct 2021 22:57 | Produced by Tolley Read more Read more