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HMRC internal manual

Employment Income Manual

HM Revenue & Customs
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Car fuel benefit: introduction

Sections 149 to 153 ITEPA 2003

Car fuel benefit is incurred whenever:

  • any fuel is provided (see EIM25515), whether or not for private use
  • for a car that attracts a car benefit charge (see EIM23015 onwards).

The charge is in addition to the relevant car benefit charge.

Note that car fuel benefit is not incurred if either of the above conditions is not met, that is if either:

  • the car does not attract a car benefit charge, or
  • no fuel at all is provided for any purpose.

For this purpose, car has the meaning given at EIM23100. So car fuel benefit charge will not apply when fuel is provided for private use in a van (see EIM22725) or other mechanically propelled road vehicle (though van fuel benefit might apply, see EIM22900 onwards).

Effect on car fuel benefit of reduction in car benefit to nil

Note that it is possible for car fuel benefit to be incurred even if there is no taxable amount of car benefit. For example, where the car is made available for private use so that there is a car benefit charge, the cash equivalent of that car benefit might be reduced to nil as a result of payments made by the director or employee for the private use of the car (see EIM25250).

If fuel is provided for private motoring in that car, the car fuel benefit charge applies.

Measure of the charge

See EIM25550 for how the cash equivalent is calculated, noting that the cash equivalent is reduced to nil in the circumstances described at EIM25555.

Years prior to 2003/04

The fuel benefit charge had a different basis in these years.