Statutory Instruments
Income Tax
Made
13th December 2021
Laid before the House of Commons
14th December 2021
Coming into force
6th April 2022
The Treasury make the following Order in exercise of the powers conferred by section 170(1A)(c), (2), (5) and (6) of the Income Tax (Earnings and Pensions) Act 2003(1):
1.—(1) This Order may be cited as the Van Benefit and Car and Van Fuel Benefit (No. 2) Order 2021.
(2) This Order comes into force on 6th April 2022 and applies to the tax year 2022-23 and subsequent tax years.
2. In section 150(1) of the Income Tax (Earnings and Pensions) Act 2003 (car fuel: calculating the cash equivalent)(2) for “£24,600” substitute “£25,300”.
3. In section 155(1B)(b) of the Income Tax (Earnings and Pensions) Act 2003 (cash equivalent of the benefit of a van)(3) for “£3,500” substitute “£3,600”.
4. In section 161(b) of the Income Tax (Earnings and Pensions) Act 2003 (van fuel: the cash equivalent)(4) for “£669” substitute “£688”.
Amanda Solloway
Craig Whittaker
Two of the Lord Commissioners of Her Majesty’s Treasury
13th December 2021
(This note is not part of the Order)
This Order amends sections 150(1), 155(1B)(b), and 161(b) of the Income Tax (Earnings and Pensions) Act 2003 (c. 1) (“the Act”).
Where an employee receives fuel for a car or van as a result of their employment and they are chargeable to tax in respect of the vehicle under sections 120 or 154 of the Act, the cash equivalent of the benefit of that fuel is treated as earnings under sections 149 and 160 of the Act.
The cash equivalent of the benefit of the fuel for a car is normally calculated by applying the “appropriate percentage” (usually calculated by reference to the CO2 emissions of the car) to the figure in section 150(1) of the Act. Article 2 of this Order increases this figure to £25,300 for the tax year 2022-23 and subsequent tax years. The cash equivalent of the benefit of fuel for a van is set out in section 161(b) of the Act. Article 4 of this Order increases this figure to £688 for the tax year 2022-23 and subsequent years.
Where a van is made available by reason of the employment to an employee for private use that is more than insignificant and not limited to ordinary commuting, section 154 of the Act treats the cash equivalent of the benefit of the van as earnings. For vans that cannot in any circumstances emit CO2 by being driven, the cash equivalent of the benefit for the tax year 2021-22 or a subsequent tax year is nil. For other vans, the cash equivalent of the benefit is set out in section 155(1B)(b) of the Act. Article 3 of this Order increases the figure in section 155(1B)(b) of the Act to £3,600 for the tax year 2022-23 and subsequent tax years.
A Tax Information and Impact Note covering this instrument will be published on the website at www.gov.uk/government/collections/tax-information-and-impact-notes-tiins.
2003 c. 1; section 170(1A) was inserted by paragraph 7(2) of Schedule 14 to the Finance Act 2004 (c. 12) with effect for the tax year 2005-06 and subsequent tax years, then substituted by section 10(1) and (6) of the Finance Act 2015 (c. 11) with effect for the tax year 2015-16 and subsequent tax years. Section 170(2) was amended by paragraph 7(3) of, and section 170(5) was amended by paragraph 7(4) of, Schedule 14 to the Finance Act 2004 with effect for the tax year 2005-06 and subsequent tax years.
The figure specified in section 150(1) was last substituted by S.I. 2021/248.
Section 155 was substituted by paragraph 5 of Schedule 14 to the Finance Act 2004 with effect for the tax year 2005-06 and subsequent tax years. Section 155(1B) was substituted by section 10(2) of the Finance Act 2015 with effect for the tax year 2015-16 and subsequent tax years. The figure specified in section 155(1B)(b) was last substituted by S.I. 2021/248.
Section 161 was substituted by paragraph 5 of Schedule 14 to the Finance Act 2004 with effect for the tax year 2005-06 and subsequent tax years. The figure specified in section 161(b) was last substituted by S.I. 2021/248.