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HMRC internal manual

Employment Income Manual

HM Revenue & Customs
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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  • can also be reduced if free fuel is withdrawn in a tax year and not reinstated, see EIM25570 and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.