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HMRC internal manual

National Insurance Manual

HM Revenue & Customs
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Class 1 NICs: Expenses and allowances: Fuel: General

The following guidance relates to fuel purchased for use in an employee’sprivately owned car. For guidance on fuel purchased for use in a company car see NIM16170. This guidance applies equally to all types of fuel, forexample petrol and diesel.

Most employers meet the cost of business fuel for employees required to use theirprivately owned cars for business purposes. Some employers also meet the costs of anemployee’s private fuel.

The rules for determining whether a NICs liability arises on payments for fuel, or on thebenefit 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 businessmileage, are the same for both tax and NICs, see SE32015.