(This note is not part of the Order)
This Order amends section 150(1) of the Income Tax (Earnings and Pensions) Act 2003 (“the Act”).
Where an employee receives fuel for a car by reason of the employee’s employment, and that person is chargeable to tax in respect of the car under section 120 of the Act, the cash equivalent of the benefit of the fuel is to be treated as earnings from the employment under section 149 of the Act and is subject to tax and national insurance contributions.
With effect from the tax year 2011-12, the cash equivalent of the benefit of the fuel is calculated by applying the “appropriate percentage” (normally calculated by reference to the CO2 emissions of a car) to the figure of £18,800 in section 150(1) of the Act.
Article 2 of this Order increases the figure in section 150(1) of the Act to £20,200 for the tax year 2012-13 and subsequent tax years.
In line with government commitments, a Tax Information and Impact Note covering this instrument will be published on the HMRC website at http://www.hmrc.gov.uk/thelibrary/tiins.htm.