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HMRC internal manual

National Insurance Manual

Class 1 NICs: Expenses and allowances: Fuel expenses/ Fuel provisions: General

Most employers meet the cost of business fuel for employees required to use their privately owned cars for business purposes. Some employers also meet the costs of an employee’s private fuel.

The rules for determining whether a NICs liability arises on payments for fuel, or on the benefit of providing fuel, depends on:

  • whether the fuel is used for business or private travel.
  • the manner in which the employer meets the cost

The rules and definitions applied to qualifying business travel, including business mileage, are the same for both tax and NICs, see SE32015.