company car fuel tax question

suso

were you supplied with a company vehicle for the complete year, or did it start part way through the year.

If you have a vehicle for the full year and start to receive fuel benefit part way through the year then you pay the full years charge.
If you receive a vehicle part way through the year and then start to receive fuel benefit then you pay an apportioned amount dating from when the vehicle useage started.

If you have a vehicle from the start of the year and stop having fuel benefit part way through then the charge is apportioned from start of tax year/start of vehicle useage (which ever is later) through to when fuel useage is withdrawn.

taxing

ceeforcat wrote: »

http://www.hmrc.gov.uk/ebu/p11d-2010.pdf

Whereabouts taxing - would be very interested if you are correct.

Hi - I am assuming you are 'in tax' so references are at:

The law-

ITEPA s149 Benefit of car fuel treated as earnings
s149(1) If in a tax year-
(a) fuel is provided for a car by reason of an employee's employment, and
(b) that person is chargeable to tax in respect of the car by virtue of section 120,
the cash equivalent of the benefit of the fuel is calculated in accordance with sections 150 to 153.

So, this is the 'first' condition for a charge - fuel has to be provided in the first place - it isn't just to be assumed that because you have a car, then you have 'fuel'. No fuel = no charge. The charge 'clock' starts from when you get the fuel.

Then, once you have the fuel:

ITEPA s.152 Car Fuel: proportionate reduction of cash equivalent

s152(1) The cash equivalent of the benefit of the fuel is to be proportionately reduced if for any part of the tax year in question the car for which the fuel is provided is unavailable (within the meaning of s143 (more than 30 days basically...)

s152(2) The cash equivalent of the benefit of the fuel is also to be proportionately reduced if for any part of the tax year in question-
(a) the facility for the provision of fuel as mentioned in section 149(1) is not available
(b) the fuel is made available only for business travel.., or
(c)the employee is required to make good....the cost

There are provisos here that you can't then stop and start again in same year - but that doesn't prevent a proportionate reduction where the benefit hasn't started until part way in to the tax year.


In the manuals:

http://www.hmrc.gov.uk/manuals/eimanual/EIM25510.htm

but note in particular the part

Sections 149 to 153 ITEPA 2003



Car fuel benefit is incurred whenever:

• any fuel is provided (see EIM25515), whether or not for private use
• for a car that attracts a car benefit charge (see EIM23015 onwards).

The charge is in addition to the relevant car benefit charge.


Note that car fuel benefit is not incurred if either of the above conditions is not met, that is if either:

• the car does not attract a car benefit charge, or
• no fuel at all is provided for any purpose.

http://www.hmrc.gov.uk/manuals/eimanual/EIM25550.htm

Regards

rowan_gibson

Taxing - i'm amazed...

thanks for spelling it all out. I think i have broken even in terms of money anyway but if i can have a reduction for the time i did not recieve personal fuel (April to September 2010) then obviously that is a good thing. I was paying for fuel and claiming back at 14p a mile so usually lost money before i recieved the fuel card so usually lost money.

I now have the joy of waiting for my p46 p60 and p11d and trying to sort the mess out!

Thanks but expect more quesitons in due course...

dori2o

taxing wrote: »

Hi - I am assuming you are 'in tax' so references are at:

The law-

ITEPA s149 Benefit of car fuel treated as earnings
s149(1) If in a tax year-
(a) fuel is provided for a car by reason of an employee's employment, and
(b) that person is chargeable to tax in respect of the car by virtue of section 120,
the cash equivalent of the benefit of the fuel is calculated in accordance with sections 150 to 153.

So, this is the 'first' condition for a charge - fuel has to be provided in the first place - it isn't just to be assumed that because you have a car, then you have 'fuel'. No fuel = no charge. The charge 'clock' starts from when you get the fuel.

Then, once you have the fuel:

ITEPA s.152 Car Fuel: proportionate reduction of cash equivalent

s152(1) The cash equivalent of the benefit of the fuel is to be proportionately reduced if for any part of the tax year in question the car for which the fuel is provided is unavailable (within the meaning of s143 (more than 30 days basically...)

s152(2) The cash equivalent of the benefit of the fuel is also to be proportionately reduced if for any part of the tax year in question-
(a) the facility for the provision of fuel as mentioned in section 149(1) is not available
(b) the fuel is made available only for business travel.., or
(c)the employee is required to make good....the cost

There are provisos here that you can't then stop and start again in same year - but that doesn't prevent a proportionate reduction where the benefit hasn't started until part way in to the tax year.


In the manuals:

http://www.hmrc.gov.uk/manuals/eimanual/EIM25510.htm

but note in particular the part

Sections 149 to 153 ITEPA 2003



Car fuel benefit is incurred whenever:

• any fuel is provided (see EIM25515), whether or not for private use
• for a car that attracts a car benefit charge (see EIM23015 onwards).

The charge is in addition to the relevant car benefit charge.


Note that car fuel benefit is not incurred if either of the above conditions is not met, that is if either:

• the car does not attract a car benefit charge, or
• no fuel at all is provided for any purpose.

http://www.hmrc.gov.uk/manuals/eimanual/EIM25550.htm

Regards

I think the part in red is the most important part there. i.e. where no fuel benefit is given at anytime.

I checked this with a 'Techie' today who confiirmed my belief that the benefit charge is applicable for the whole year where it is made available part way through the year but the car benefit is avaialble for the whole year. apportionment should only apply where the fuel benefit is removed part way through the year.

Also, if fuel benefit is removed partway through the year, but is then reinstated before the end of the tax year, then again the benefit charge will be due for the full year.

ceeforcat

That is also my understanding dori20 - that is why I previously attached a link to the P11D. I have been informed by a well known tax lecturer today that this is the reason why the form asks you for the date fuel withdrawn, not provided.

jimmo

taxing,
You have quoted S152(1)ITEPA 2003 and S152(2) but omitted S152(3)
"The fact that any of the conditions specified in subsection (2) is met for part of a tax year is to be disregarded if there is a time later in that year when none of those conditions is met."
http://www.legislation.gov.uk/ukpga/2003/1/section/152
Therefore the law is constructed as follows:
S149 In the tax year fuel is provided. Therefore there is a benefit.
S150 Calculate the benefit (for the year).
S152 Test whether any periods in the year are voided and so reduce the benefit. In this particular case s152(2) ignores the potentially void period i.e. there are no void periods and the benefit charge is not reduced.
rowan_gibson,
It is probably best not to jump to conclusions at this time. You have a few people debating the issue and each one of us obviously thinks that he or she is right. Hopefully we will all agree eventually. However it is your money that is at stake and I, for one, am not going to tell you that taxing is wrong. I think he or she is wrong but am prepared to learn if I am wrong.