Income Tax (Earnings and Pensions) Act 2003 section 162

Van fuel: nil cash equivalent

Section 162 sets out the circumstances in which the cash equivalent of the benefit of fuel provided for a company van is reduced to nil, meaning no tax charge arises on the employee.

• The cash equivalent of van fuel benefit is nil if either of two conditions (Condition A or Condition B) is met.
• Condition A is met where the employee is required to reimburse the full cost of fuel provided for private use, and actually does so by 6 July following the end of the relevant tax year.
• Condition B is met where the fuel is made available only for business travel during the tax year in question.
• If neither condition is met, the full van fuel benefit charge applies for the tax year.