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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 provided car: Liability for Class 1A NICs

Liability for Class 1A NICs on fuel Where fuel is provided for use in a car which attracts a car benefit charge under the rules in Chapter 6 of Part 3 ITEPA 2003 (before 6 April 2003 – section 157 of ICTA 1988), an income tax charge arises on the fuel under section 149 ITEPA 2003 (before 6 April 2003 – section 158 of ICTA 1988), unless

  • the director or employee is required to make good the cost of all private fuel and does so; or
  • the fuel is available for business travel only.Where income tax liability does not arise on the fuel, there can be no Class 1A NICs liability because there are no general earnings chargeable to income tax under ITEPA 2003 (before 6 April 2003 – emoluments chargeable to income tax under Schedule E), see

NIM13070.

Employee makes good cost of private fuel after Class 1A NICs are dueIf an employee makes good the cost of all private fuel after the Class 1A NICs is due to be paid to HMRC, i.e. 19th July (or 22nd July if payment is by an approved electronic method), Class 1A NICs liability arises on the cash equivalent of the car fuel benefit without taking the amount made good into account. For guidance about the income tax position where an employee makes good late, see EIM23780 (before 6 April 2003 – see SE23773).

Position before 6 April 2002Applying the law strictly, there may be Class 1 NICs liability on fuel purchased for use in a car which attracts a car benefit charge, see

NIM16176. The Class 1 NICs liability is administratively disregarded in favour of a Class 1A NICs liability.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Position from 6 April 2002 - Paragraph 7D of Part 8 of Schedule 3 to the SSCR 2001Paragraph 7D of Part 8 of Schedule 3 to the SS(C)R 2001 was inserted by regulations 2 and 7 of the Social Security (Contributions) (Amendment No 2) Regulations 2002 (SI 2002 No 307) with effect from 6 April 2002. It provided a statutory exemption from Class 1 NICs liability where fuel is provided for use in a car which attracts a car benefit charge.

Calculating the amount of Class 1A NICs dueThe amount of Class 1A NICs due on fuel provided for use in a car which attracts a car benefit charge is calculated using the fuel benefit scale rates applied for tax purposes under section 149 ITEPA 2003 (before 6 April 2003 – section 158 of ICTA 1988). Guidance on calculating fuel benefits is contained at EIM23750 (before 6 April 2003 – see SE23750).

Employer pays a mileage allowance or round sum allowance for fuel Where an employer pays a

  • mileage allowance – see NIM16178; or
  • round sum allowance – see NIM16179.