1. When the employee makes good the cost of all fuel provided
EIM23780 explains what is meant by `making good' and EIM23781 explains the use of HMRC's advisory fuel rates in this context. In this case, the charge is reduced to nil. However, there is no reduction at all unless the employee makes good the full cost of all the fuel provided for private use. There is no 'pound for pound' reduction.
2. Unavailability of the car for which the fuel is provided
If the car itself is unavailable to the employee, the fuel benefit charge is reduced on a time-apportionment basis in exactly the same way as the car benefit charge. EIM23763 explains how to carry out the calculation.
3. When the facility for private fuel is withdrawn and not reinstated in the same tax year
The benefit is also reduced on a time-apportionment basis for the period after the provision of fuel for private use is withdrawn.
If the employee receives private fuel again, no apportionment is available for that tax year.
Note that there is no apportionment for the period before fuel is first provided.
There is fuller guidance at EIM23764.
4. Interaction of reasons 2 and 3
Reductions for these reasons are combined as shown in example EIM23773.
5. Shared car
If the car benefit charge is reduced because the car is shared, the same proportionate reduction is made to the fuel benefit charge. For more guidance look at EIM23765.
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