EIM22920 | Van fuel benefit from 2005 to 2006: when cash equivalent is nil

Section 162 ITEPA 2003

This page only applies if the van fuel benefit charge is incurred (where the restricted private use condition (EIM22795) is not met). For full details see EIM22900.

Where the charge has been incurred, it is reduced to nil if either condition A or condition B is met.

Condition A

This is met if, in the tax year in question:

• the employee (this includes a director) is required to make good (see EIM22945) to the person providing the fuel the whole of the expense incurred by that person in connection with the provision of fuel for the employee’s private use and

• the employee does make good that expense. From the 2017 to 2018 tax year the latest date for making good the cost of all fuel provided for private use when calculating the van fuel benefit charge is by 6 July following the tax year in which the private fuel is provided.

Condition B

This is met if in the tax year in question the fuel is made available only for business travel (see EIM22735).

Meaning of ‘private use’ in condition A

‘Private use’ includes all non-business use, including commuting and insignificant private use. If the employee only makes good the cost of fuel for private use excluding commuting, this is not sufficient to reduce the van fuel benefit charge to nil.

This requirement is set out in Section 151(2) ITEPA 2003, which states that the employee must make good “the whole of the expense incurred…in connection with the provision of fuel for the employee’s private use” and actually do so.