NIM16173 - Class 1A National Insurance contributions: Special Class 1A NICs cases: Fuel for use in a privately owned car: Liability for Class 1 NICs
Paragraph 7D of Part 8 of Schedule 3 to the Social Security (Contributions) Regulations 2001 (SSCR 2001) (SI 2001 No 1004)
Provision of fuel by a payment in kind
Where an employer provides fuel for use in a car which attracts a car benefit charge under section 120 of ITEPA 2003 and that fuel is provided by way of a payment in kind (excluding non-cash vouchers) the payments in kind are disregarded from earnings so that no Class 1 NICs are due (see NIM02020). For example:
- fuel provided direct from the employer’s own fuel pump; or
- the employee purchases the fuel on behalf of his employer, see NIM06054. (purchases on behalf of the employer may be made by cash, credit card, garage account, cheque or fuel agency card).
See NIM16171 about Class 1A NICs liability.
Provision of fuel not by a payment in kind
Where an employer provides fuel by means of something which is not a payment in kind (see NIM02020), Class 1 NICs liability arises on the cost of that fuel, if the fuel is used for:
- private purposes
- business purposes where the actual cost of the business expense is less than the amount the employee receives.
Common methods of meeting fuel costs are shown at NIM06052. If provision of fuel is made by means of a non-cash voucher Class 1 NICs liability arises.
This rule applies to fuel provided for use in:
- a privately owned car, see NIM06050 onwards, and
- a provided car which attracts a car benefit charge under the rules in Chapter 6 of Part 3 ITEPA 2003.