Part 3Employment income: earnings and benefits etc. treated as earnings
C2C1Chapter 6Taxable benefits: cars, vans and related benefits
Pt. 3 Ch. 6 modified (6.4.2021 for the tax year 2021-22) by Finance Act 2020 (c. 14), s. 10
F14Van fuel: benefit treated as earnings
Ss. 155-164 substituted for ss. 155-166 (with effect in accordance with s. 80(2) of the amending Act) by Finance Act 2004 (c. 12), Sch. 14 para. 5
160Benefit of van fuel treated as earnings
1
If in a tax year—
a
fuel is provided for a van by reason of an employee’s employment,
b
that person is chargeable to tax in respect of the van by virtue of section 154 F1or 154A , and
c
the cash equivalent of the van for that year is that under F5section 155(1B)(b),
the cash equivalent of the benefit of the fuel is to be treated as earnings from the employment for that year.
2
The cash equivalent of the benefit of the fuel is calculated in accordance with sections 161 to 164.
3
Fuel is to be treated as provided for a van, in addition to any other way in which it may be provided, if—
a
any liability in respect of the provision of fuel for the van is discharged,
b
a non-cash voucher or a credit-token is used to obtain fuel for the van,
c
a non-cash voucher or a credit-token is used to obtain money which is spent on fuel for the van, or
d
any sum is paid in respect of expenses incurred in providing fuel for the van.
F124
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F75
This section is subject to section 160A.
160AF6Benefit of van fuel treated as earnings: optional remuneration arrangements
1
This section applies if—
a
fuel is provided for a van in a tax year by reason of an employee's employment,
b
the benefit of the fuel is provided pursuant to optional remuneration arrangements, and
c
the employee is chargeable to tax in respect of the van in the tax year by virtue of section 154 or 154A.
2
If the condition in subsection (3) is met—
a
the amount foregone with respect to the benefit of the fuel (see section 69B) is to be treated as earnings from the employment for that year, and
b
section 160(1) does not apply.
3
The condition mentioned in subsection (2) is that the amount foregone with respect to the benefit of the fuel is greater than the cash equivalent of the benefit of the fuel.
4
For the purposes of subsection (3), assume that the cash equivalent of the benefit of the fuel is zero if the condition mentioned in subsection (5) is met.
5
The condition mentioned in subsection (4) is that the benefit of the fuel would be exempt from income tax but for section 228A (exclusion of certain exemptions).
6
Where it is necessary for the purposes of subsections (2)(a) and (3) to apportion an amount of earnings to the benefit of the fuel in the tax year, the apportionment is to be made on a just and reasonable basis.
In this subsection “earnings” is to be interpreted in accordance with section 69B(5).
F14161Van fuel: the cash equivalent
The cash equivalent of the benefit of the fuel is—
a
where the tax year is the tax year 2005-06 or 2006-07, nil, and
b
where the tax year is a later tax year, F15£688.
162F14Van fuel: nil cash equivalent
1
The cash equivalent of the benefit of the fuel is nil if condition A or B is met.
2
Condition A is met if F13...—
a
F3in the tax year in question, the employee is required to make good to the person providing the fuel the whole of the expense incurred by that person in connection with the provision of the fuel for the employee’s private use, and
b
the employee does make good that expense F2on or before 6 July following that tax year .
3
Condition B is met if in the tax year in question the fuel is made available only for business travel (see section 171(1)).
F14163Van fuel: proportionate reduction of cash equivalent
1
The cash equivalent of the benefit of the fuel is to be proportionately reduced if for any part of the tax year in question the van for which the fuel is provided is unavailable (within the meaning of section 156 (reduction for periods when van unavailable)).
2
But if section 159 (van temporarily replaced) applies—
a
section 160 applies as if the replacement van were the normal van, and
b
for the purposes of subsection (1) the replacement van is to be treated as unavailable on the days during the period on which it replaces the normal van.
3
The cash equivalent of the benefit of the fuel is also to be proportionately reduced if F8...—
a
F11for any part of the tax year in question, the facility for the provision of fuel as mentioned in section 160 (1) is not available,
b
F10for any part of the tax year in question, the fuel is made available only for business travel (see section 171(1)), or
c
the employeeF9—
i
for any part of the tax year in question,is required to make good to the person providing the fuel the whole of the expense incurred by that person in connection with the provision of the fuel for the employee’s private useF4, and
ii
the employee does make good that expense on or before 6 July following that tax year
4
The fact that any of the conditions specified in subsection (3) is met for part of a tax year is to be disregarded if there is a time later in that year when none of those conditions is met.
5
Where the cash equivalent is to be proportionately reduced under subsection (1) or (3) (or under both those subsections), the reduced amount is given by the formula—
where—
CE is the amount of the cash equivalent before any reduction,
Y is the number of days in the tax year in question, and
D is the total number of days in the tax year on which either the van is unavailable or one or more of the conditions in subsection (3) is met.
F14164Van fuel: reduction of cash equivalent
If a reduction of the cash equivalent of the benefit of the van for which the fuel is provided is made under section 157 (reduction of cash equivalent where van is shared), a corresponding reduction is to be made in relation to the cash equivalent of the benefit of the fuel.
Pt. 3 Ch. 6 modified (6.4.2020 for the tax year 2020-21) by Finance Act 2020 (c. 14), s. 9