Class 1A National Insurance on fuel provided to employees

Cars provided to employees were reported correctly to HMRC as benefits. The taxpayer also paid fuel costs to non-office based employees. They paid using a fuel card which the taxpayer settled. The employees had to reimburse the private element of their fuel costs and on the basis that it believed no fuel benefit in kind arose the taxpayer did not enter this on the individual forms P11D.

HMRC disputed this process and raised assessments to recover class 1A National Insurance on the benefit. The taxpayer appealed. Referring to CRC v Apollo Fuels Ltd [2016] STC 1594 it said this was a ‘fair value’ situation because the employees bore the cost of the fuel they used for private purposes. There was no benefit in the ordinary sense of the word conferred on staff.

The First-tier Tribunal said the concept of fair bargain applied when employees received something from their...