SE23767 - Car fuel benefit: 2003/04 onwards: withdrawal of free fuel

Section 158 ICTA 1988 as amended by section 34 FA 2002

See SE23765 for a summary of changes to the fuel benefit charge from 2003/04 onwards.

Years to 2002/03

Once a fuel benefit charge was incurred, it operated for the entire time the car was available to the employee in a particular tax year. Fuel benefit was reduced only for periods when the car was not available.

Years from 2003/04

Fuel benefit is reduced for periods when the car is not available, as before, but is also proportionately reduced if for any part of that year:

• the facility for the provision of fuel for any purpose is not available, or
• the employee is required to make good to the person providing the fuel the whole of the expense incurred by him in connection with the provision of the fuel for his private use and he does so, or
• the fuel is made available only for business travel.

The fact that any of the conditions above is met for part of a year shall be disregarded if there is a time later in that year when any of those conditions is not met.

It follows that, where the facility for the provision of free fuel for private use is withdrawn by the employer during a tax year and not reinstated, the charge is apportioned so that the following period does not count towards the number of days for which the charge is made:

• the number of days after withdrawal of free fuel but during which the car was still available (in effect, these days are added to any other days in the tax year for which the car itself was unavailable).

This can be achieved:

• by the employer no longer providing free fuel for private use, or
• by the employer requiring the employee to make good the cost of all private fuel provided after a set date and by the employee doing so ( SE23773).

Note that there is no apportionment for days before provision of free fuel commenced.

There are three illustrative examples at SE23768.

2003/04 onwards

For full guidance see the contents page at EIM23750CT.