Income Tax (Earnings and Pensions) Act 2003 section 149

Benefit of car fuel treated as earnings

Section 149 deals with the taxation of fuel provided for a company car, treating the cash equivalent of the fuel benefit as part of the employee's earnings.

• Where an employer provides fuel for a company car that is itself subject to a car benefit charge, the cash equivalent of that fuel benefit is taxed as the employee's earnings for the relevant tax year
• Fuel is treated as "provided" broadly — this includes direct supply, paying fuel bills, using non-cash vouchers or credit-tokens to obtain fuel or money spent on fuel, and reimbursing fuel expenses
• The cash equivalent of the fuel benefit is calculated using the rules set out in sections 150 to 153 of the Act
• Electrical energy and any energy used by a car that cannot under any circumstances produce CO2 emissions when driven are excluded from the definition of "fuel" for these purposes