Income Tax (Earnings and Pensions) Act 2003 section 151

Car fuel: nil cash equivalent

Section 151 sets out the circumstances in which the taxable cash equivalent of employer-provided car fuel is reduced to nil, so that no benefit-in-kind charge arises.

• Where an employee is required to reimburse the full cost of privately used fuel and does so by 6 July after the tax year, the cash equivalent is nil (Condition A).
• Where fuel is provided exclusively for business travel, the cash equivalent is also nil (Condition B).
• Both conditions operate independently — meeting either one is sufficient to eliminate the fuel benefit charge.
• Partial reimbursement of private fuel costs is not enough to meet Condition A; the employee must repay the entire expense.