Car fuel benefit: calculating the cash equivalent
Section 150 ITEPA 2003
The car fuel benefit charge is incurred as detailed at EIM25510.
The cash equivalent of the charge is reduced to nil for a particular tax year if either of the conditions in EIM25555 is met.
Otherwise, the cash equivalent:
- is calculated for a full tax year as shown at EIM25560
- is then reduced proportionately if the car is unavailable for part of the year, see EIM25565 and
- can also be reduced if free fuel is withdrawn in a tax year and not reinstated, see EIM25570 and
- can also be correspondingly reduced if a reduction is made to the cash equivalent of the benefit of a car to an employee because the car is shared, see EIM25575.
Years prior to 2003/04
The fuel benefit charge had a different basis in these years.