NIM16177 - Class 1A NICs: Special Class 1A NICs cases: Fuel for use in a provided car - Liability for Class 1A NICs

Where fuel is provided for use in a car which attracts a car benefit charge under the special rules in Chapter 6 of Part 3 ITEPA 2003, a tax liability arises on the fuel under section 149 ITEPA 2003, unless:

• the director or employee is required to make good the cost of all private fuel and does so
• the fuel is available for business travel only.

Although technically there is a Class 1 NICs liability on any fuel purchased for use in a car which attracts a car benefit charge, see NIM16176, the Class 1 NICs liability is administratively disregarded in favour of a Class 1A NICs liability.

The amount of Class 1A NICs due on fuel provided for use in a car which attracts a car benefit charge is calculated using the fuel benefit scale rates applied for tax purposes undersection 149 ITEPA 2003. Guidance on calculating fuel benefits is contained at EIM23750.

The only exception to this administrative rule is where an employer pays either a mileage allowance or a round sum allowance, see NIM16178 (mileage rates) and NIM16179 (round sum allowances).