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HMRC internal manual

Employment Income Manual

Van fuel benefit from 2005/06: when cash equivalent is nil

Section 162 ITEPA 2003

This page only applies if the van fuel benefit charge is incurred, i.e. where the restricted private use condition (EIM22795) is not met. For full details see EIM22900.

Where the charge has been incurred, it is reduced to nil if either condition A or condition B is met.

Condition A

This is met if, in the tax year in question:

  • the employee (this includes a director) is required to make good (see EIM22945) to the person providing the fuel the whole of the expense incurred by that person in connection with the provision of fuel for the employee’s private use and
  • the employee does make good that expense. From the 2017/18 tax year the latest date for making good the cost of all fuel provided for privae use when calculating the van fuel benefit charge is by 6 July following the tax year in which the private fuel is provided.

Condition B

This is met if in the tax year in question the fuel is made available only for business travel (see EIM22735).

Meaning of ‘private use’ in condition A

‘Private use’ means all private use, including commuting; see diagram. If the employee only makes good the cost of private use other than commuting, this is not sufficient to reduce the van fuel benefit charge to nil.

2005/06 and 2006/07

Because the van fuel benefit charge is nil for these two years, its existence can effectively be ignored until 2007/08.