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HMRC internal manual

National Insurance Manual

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HM Revenue & Customs
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Class 1A National Insurance contributions: Special Class 1A NICs cases: Fuel for use in a privately owned car: Liability for Class 1 NICs

Provision of fuel not by a payment in kindWhere an employer provides fuel by means of something which is not a payment in kind (see NIM02020), Class 1 NICs liability arises on the cost of that fuel, if the fuel is used for

  • private purposes
  • business purposes where the actual cost of the business expense is less than the amount the employee receives. Common methods of meeting fuel costs are shown at

NIM06052. If provision of fuel is made by means of a non-cash voucher Class 1 NICs liability arises.

This rule applies to fuel provided for use in

  • a privately owned car, see NIM06050 onwards, and
  • a provided car which attracts a car benefit charge under the rules in Chapter 6 of Part 3 ITEPA 2003 (before 6 April 2003 – section 157 ICTA 1988).For periods before 6 April 2002, where

  • fuel is provided for use in a car which attracts a car benefit charge under section 157 of ICTA 1988; and
  • the provision of fuel is not by way of a payment in kindHMRC administratively disregards payments in respect of fuel from earnings so that Class 1 NICs liability does not arise.

Regulation 7(2) of the Social Security (Contributions) (Amendment No. 2) Regulations 2002 (SI 2002 No 307) and paragraph 7D of Part 8 of Schedule 3 to the SS(C)R 2001From 6 April 2002, where fuel is provided for a car chargeable to income tax under section 158 of ICTA 1988 (car fuel benefit, see SE23750), Class 1 NICs liability cannot arise because any payments by way of the provision of fuel are disregarded from earnings when calculating Class 1NICs.

Provision of fuel by a payment in kindWhere

  • an employer provides fuel for use in a car which attracts a car benefit charge under section 120 of ITEPA 2003 (before 6 April 2003 – section 157 of ICTA 1988); and
  • that fuel is provided by way of a payment in kind (excluding non-cash vouchers), for example

    • fuel provided direct from the employer’s own fuel pump; or
    • the employee purchases the fuel on behalf of his employer, see NIM06054. (purchases on behalf of the employer may be made by cash, credit card, garage account, cheque or fuel agency card) payments in kind are disregarded from earnings so that no Class 1 NICs are due (see NIM02020). See

NIM16171 about Class 1A NICs liability.