The Van Benefit and Car and Van Fuel Benefit Order 2016
S.I. 2016/1174 · Made 5 December 2016
Income Tax
Made 5th December 2016
Laid before the House of Commons 6th December 2016
Coming into force 31st December 2016
The Treasury, in exercise of the powers conferred by section 170(1A), (2), (5) and (6) of the Income Tax (Earnings and Pensions) Act 2003f1, make the following Order:
Annotations to the whole text
Footnotes
- f1
-
2003 c. 1; section 170(1A) was substituted by section 10(1) and (6) of the Finance Act 2015 (c. 11), section 170(2) and (5) was amended by paragraphs 1 and 7 of Schedule 14 to the Finance Act 2004 (c. 12).
Contents
- 1Citation, commencement and application
- 2Amendment to section 150 of the Income Tax (Earnings and Pensions) Act 2003
- 3Amendment to section 155 of the Income Tax (Earnings and Pensions) Act 2003
- 4Amendment to section 161 of the Income Tax (Earnings and Pensions) Act 2003
- Signature
- Explanatory note
1Citation, commencement and application
This Order may be cited as the Van Benefit and Car and Van Fuel Benefit Order 2016.
This Order comes into force on 31st December 2016 and applies to the tax year 2017-18 and subsequent tax years.
2Amendment to section 150 of the Income Tax (Earnings and Pensions) Act 2003
In section 150(1) of the Income Tax (Earnings and Pensions) Act 2003 (car fuel: calculating the cash equivalent)f1 for “£22,200” substitute “£22,600”.
3Amendment to section 155 of the Income Tax (Earnings and Pensions) Act 2003
In section 155(1B)(a) and (b) of the Income Tax (Earnings and Pensions) Act 2003 (cash equivalent of the benefit of a van)f1 for “£3,170” substitute “£3,230”.
4Amendment to section 161 of the Income Tax (Earnings and Pensions) Act 2003
In section 161(b) of the Income Tax (Earnings and Pensions) Act 2003 (van fuel: the cash equivalent)f1 for “£598” substitute “£610”.
Signature
Andrew Griffiths
David Evennett
Two of the Lords Commissioners of Her Majesty’s Treasury
5th December 2016
Explanatory note
(This note is not part of the Order)
This Order amends sections 150(1), 155(1B) and 161(b) of the Income Tax (Earnings and Pensions) Act 2003 (c. 1) (“the Act”).
Where an employee receives fuel for a car or van as a result of their employment and they are chargeable to tax in respect of that vehicle under sections 120 or 154 of the Act, the cash equivalent of the benefit of that fuel is treated as earnings under sections 149 and 160 of the Act.
The cash equivalent of the benefit of fuel for a car is normally calculated by applying the “appropriate percentage” (normally calculated by reference to the CO2 emissions of the car) to the figure in section 150(1) of the Act. Article 2 of this Order increases this figure to £22,600 for the tax year 2017-18 and subsequent tax years. The cash equivalent of the benefit of fuel for a van is set out in section 161(b) of the Act. Article 4 of this Order increases this figure to £610 for the tax year 2017-18 and subsequent tax years.
Where a van is made available to an employee for private use that is more than insignificant and not limited to ordinary commuting, section 154 of the Act treats the cash equivalent of the benefit of the van as earnings. For vans that cannot in any circumstances emit CO2 by being driven, the cash equivalent for the tax years 2015-16 to 2021-22 is normally calculated by applying the “appropriate percentage” (calculated by reference to the tax year) to the figure in section 155(1B)(a) of the Act. For other vans, the cash equivalent is set out in section 155(1B)(b) of the Act. Article 3 of this Order increases these figures to £3,230 for the tax year 2017-18 and subsequent tax years.
A Tax Information and Impact Note covering this instrument will be published on the government website at https://www.gov.uk/government/collections/tax-information-and-impact-notes-tiins.