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HMRC internal manual

Employment Income Manual

Car fuel benefit: belated making good

Belated making good may occur in two situations:

Delays incurred in normal administration

In many instances, the making good required by EIM25650 is completed by the end of the tax year. But you will find cases where making good does not occur until after the end of the tax year. This may be where mileage records and repayments in the final month or so of the year take a little time to process. You can accept this as meeting the terms of the legislation provided final settlement is made without unreasonable delay.

Delays resulting from administrative error

In addition, if you find that:

  • as a result of an unintentional error 
  • fuel has been provided for private use and has not been made good and 
  • the facts clearly show that the employee would have been required to promptly make good that fuel had the error been discovered in the relevant tax year

you can accept that the terms of the legislation are met if the making good occurs within 30 days of discovery of the error.

You can accept that the third condition is satisfied if:

  • the employer has a clear policy that fuel is not to be provided for private use (as defined for car and fuel benefits purposes, see EIM23305) and
  • any fuel provided for private use other than the occasion on which the error occurred was identified and made good at the relevant time.

This part of the concession was scrutinised in 2006 by the Special Commissioners in Impact Foiling Ltd v HMRC (SPC562), a case in which the Special Commissioner found for HMRC.