Income Tax (Earnings and Pensions) Act 2003 section 161

Van fuel: the cash equivalent

Section 161 sets the cash equivalent value of the taxable benefit arising when an employer provides fuel for private use in a company van.

• The cash equivalent of van fuel benefit was nil for the tax years 2005-06 and 2006-07, meaning no tax charge arose during that introductory period.
• For all tax years from 2007-08 onwards, the cash equivalent of the van fuel benefit is a fixed flat-rate amount of £669.
• This flat-rate figure is set by statutory instrument and may be updated from time to time by Treasury order, most recently by The Van Benefit and Car and Van Fuel Benefit (No. 2) Order 2021.
• The van fuel benefit charge only applies where fuel is provided for private use; if the employee reimburses the full cost of private fuel, no benefit in kind arises.