The Van Benefit and Car and Van Fuel Benefit Order 2015

Statutory Instruments

2015 No. 1979

Income Tax

The Van Benefit and Car and Van Fuel Benefit Order 2015

Made

7th December 2015

Laid before the House of Commons

8th December 2015

Coming into force

31st December 2015

The Treasury, in exercise of the powers conferred by section 170(1A), (2), (5) and (6) of the Income Tax (Earnings and Pensions) Act 2003(1), makes the following Order:

Citation, commencement and effect

1.—(1) This Order may be cited as the Van Benefit and Car and Van Fuel Benefit Order 2015.

(2) This Order comes into force on 31st December 2015 and has effect for the tax year 2016-17 and subsequent tax years.

Amendment to section 150 of the Income Tax (Earnings and Pensions) Act 2003

2.  In section 150(1) of the Income Tax (Earnings and Pensions) Act 2003 (car fuel: calculating the cash equivalent)(2) for “£22,100” substitute “£22,200”.

Amendment to section 155 of the Income Tax (Earnings and Pensions) Act 2003

3.  In section 155(1B)(a) and (b) of the Income Tax (Earnings and Pensions) Act 2003 (cash equivalent of the benefit of a van)(3) for “£3,150” substitute “£3,170”.

Amendment to section 161 of the Income Tax (Earnings and Pensions) Act 2003

4.  In section 161(b) of the Income Tax (Earnings and Pensions) Act 2003 (van fuel: the cash equivalent)(4) for “£594” substitute “£598”.

George Hollingbery

Mel Stride

Two of the Lords Commissioners of Her Majesty’s Treasury

7th December 2015

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 (“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 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 £22,200 for the tax year 2016-17 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 £598 for the tax year 2016-17 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 2019-20 is 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 £3,170 for the tax year 2016-17 and subsequent tax years.

A Tax Information and Impact Note has not been prepared for this Instrument as it gives effect to previously announced policy.

(1)

2003 c. 1; section 170(1A) was substituted by section 10(1) and (6) of the Finance Act 2015 (c. 11) (“FA 2015”). Section 170(2) and (5) was amended by paragraphs 1 and 7 of Schedule 14 to the Finance Act 2004 (c.12) (“FA 2004”).

(2)

The amount specified in section 150(1) was last substituted by S.I. 2014/2896.

(3)

Section 155(1B) was substituted by section 10(1) and (2) of the FA 2015.

(4)

Section 161 was substituted by paragraphs 1 and 5 of Schedule 14 to the FA 2004. The amount specified in section 161(b) was last substituted by S.I. 2014/2896.