26 |
provides fuel for a car which is not a company car, in which case the general rules of sections 72 (part 3) and 203 (part 10) apply. |
The fuel charge applies to company cars but not to company vans; again sections 72 and 203 may apply. |
17A.4.2.1 £8,500 Threshold |
A problem arises if E, an employee, has, eg, a salary of £8,000 and potential charge of £450. E is not within the charge to tax, being below the £8,500 limit. Suppose, however, that E uses a credit card belonging to R (E’s employer) to pay for £200 of repairs to the car. By ITEPA section 94 (ex TA 1988, section 142) (see above at §14A.8.3) E is taxable on £200, but on crossing the £8,500 threshold the £200 is taken out of charge again. To break this loop it is provided that car expenses which would be charged if TA 1988, section 157 did not apply, will be taken into account in determining whether an employee is higher paid; liability will then be assessed either on the scale benefit or on the relevant expense as appropriate.137 |
In 1992 a lower charge for diesel was introduced. This lower charge no longer applies but the rates are still separate. For cars up to 2,000 cc the charge is £1,540; for cars above 2,000 cc the charge is £2,270. |
17A.4.3 Part 3 Chapter 7: Low Interest Loans |
Under ITEPA section 175 TA 1988, section 160(1) directors and non-lower-paid employees are taxable on a cash equivalent where taxable but cheap loans provided the loans are employment related.138 A cash equivalent arises if the employee pays no interest on the loan or pays at a rate below the official rate, currently [2000] 6.25%.139 Section 188 160(2), which deals with writing off such loans, is discussed below. A loan is made when it is advanced and not when its terms are varied.140 A loan is caught whether the employer grants or merely facilitates the loan.141 |