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HMRC internal manual

Employment Income Manual

HM Revenue & Customs
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Van fuel benefit from 2005/06: example

Sections 160-164 ITEPA 2003

This example illustrates the principles at EIM22900 onwards.

A van is available to employee E from 6 April to 31 December 2007 and the restrictedprivate use condition (EIM22795) is not met. Fuel is providedfor private use from 1 May until 30 November 2007, after which the facility is withdrawnand is not reinstated for this van in 2007/08.


Van fuel charge for 2007/08 (whole year, EIM22915)     £500
Days van unavailable (EIM22825): 1 January to 5 April 2008   96 days  
Additional days after fuel withdrawn (EIM22930): 1 to 31 December (note that the days from 6 to 30 April 2007 are not excluded because fuel is provided for the same van later in the same tax year)   31 days  
Total days by which the fuel charge can be reduced   127 days  
Reduction for unavailability: £500 x 127/366 (no. of days in 2007/08)     £174
Van fuel charge for 2007/08 for this van     £326

Van shared

If the charge on E is reduced because the van is shared (EIM22830),the fuel benefit charge is reduced to the same extent.

On the above facts,

  • the gross van benefit charge would be £3,000 (EIM22790)
  • the reduction for unavailability would be 3,000 x 96/366 = £787, making the net charge £2,213
  • if the just and reasonable reduction for sharing were 30%, reducing the van benefit charge to £1,549 before taking into account any payments for private use, the van fuel charge above would also be reduced by 30% to £228
  • the van fuel benefit charge would not be affected by any payments the employee makes for private use of the van, even if the van benefit charge were reduced to nil by those payments (EIM22840).

Employee paying for fuel for private use

If employee E is required to pay for all private fuel in the year, anddoes so, the van fuel benefit charge is reduced to nil (EIM22920).

If employee E does not pay the full cost of private fuel, the charge is not reduced atall. The van fuel benefit charge operates in exactly the same way as the car fuel benefitcharge: the charge is not reduced pound for pound by payments by employee E; it is eitherreduced to nil, or not at all.

2005/06 and 2006/07

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

Years prior to 2005/06

There was no separate charge for van fuel before 2005/06 because the benefit wascovered by the van benefit charge, see EIM22068.