SE23777 - Car fuel benefit: mileage allowances paid by the employer relating to a provided car

Section 158(6)(b) ICTA 1988

The car fuel benefit charge will be nil if the employer pays the employee a mileage allowance which does no more than meet the cost of fuel used for business travel. But one will arise where, for example, the payments to the employee cover travel between home and the permanent workplace (see SE23080 for meaning of business travel and private use).

Do not assess a car fuel benefit charge in cases where the mileage allowance which is paid solely in respect of genuine business journeys exceeds the cost of fuel for those journeys. It does not follow that the excess is a payment for private fuel. In such a case the difference between the allowance received and the cost of fuel used may be assessable as an emolument under Section 19(1)1 ICTA 1988 (see SE10150).

Advisory Fuel Rates

These were introduced in January 2002. For details see the Inland Revenue's public website, inlandrevenue.gov.uk/cars/fuel_company_cars.htm.

2003/04 onwards

The car fuel benefit has a different basis for these years. See the contents page at EIM23700.