EIM23762 - Car fuel benefit: cash equivalent for a full year

Section 150 ITEPA 2003

The car fuel benefit charge is incurred as detailed at EIM23750.

Basic rule: charge for a full year

The cash equivalent for a full tax year is calculated by multiplying:

• a fixed sum, set for each tax year by Section 150(1) ITEPA 2003 (see EIM23766)
• by the same appropriate percentage used at step 5 of the method statement in Section 121(1) ITEPA 2003 to calculate the car benefit charge. Relevant guidance on the car benefit charge and the appropriate percentage starts at EIM23350. The appropriate percentage calculated from a notional CO2 emissions figure agreed under EIM23643 should be used wherever this applies.

The appropriate percentage therefore includes all supplements and reductions, so takes account of different fuels.

The only exception is for vehicles propelled by electricity only (type E, see EIM23435) for which no fuel benefit charge is made.

Example

There is an example at EIM23770.

Possible reductions in the charge

The fuel benefit charge calculated in this way is subject to proportionate reduction:

• see EIM23763 if the car is unavailable for part of the year
• see EIM23764 if free fuel is withdrawn in a tax year and not reinstated
• see EIM23765 if the car is shared.

Years prior to 2003/04

The fuel benefit charge had a different basis in these years. See the contents page at SE23750CO for details.