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HMRC internal manual

National Insurance Manual

Class 1A National Insurance contributions: Special Class 1A NICs cases: Fuel for use in a privately owned car: General

Section 10(1) of the SCBA 1992Where an employer provides fuel to employees for use in their privately owned cars and the fuel is provided as a benefit in kind rather than by

  • a cash payment
  • the use of an employer’s credit or fuel card or cheque
  • reimbursement,
  • voucherClass 1A NICs liability will arise if the fuel is used for private purposes and the employee does not reimburse the employer the cost of the fuel, see

NIM15200, and the cost of the fuel is or is treated as general earnings chargeable to income tax under ITEPA 2003 (before 6 April 2003 – is or is treated as an emolument chargeable to income tax under Schedule E). The most common method of supplying fuel as a benefit is direct from an employer’s own fuel pump. See NIM06052 onwards for information on alternative methods of providing fuel which will also attract a Class 1A NICs liability.

The amount of Class 1A NICs due is calculated on the cash equivalent of the fuel calculated for tax purposes before any deduction for business mileage.

If it is alleged that when purchasing fuel, the employee did so on behalf of their employer, see NIM06054.