In Excel Computer Systems PLC v HMRC [2018] TC06561 the First Tier tribunal upheld NIC decisions for class 1A  despite employees making good the private fuel provided; payment was not made within the tax year and no concession applied as the company’s fuel card policy did not meet the necessary conditions.

An employee is taxed on the cash equivalent of Fuel benefit if an employer makes any type of fuel available for private use.

  • The benefit can be reduced if the employee 'makes good' the cost of private use fuel.
  • From 2017/18 the deadline for this is 6 July following the end of the tax year; for prior periods s151 ITEPA 2003 required that making good took place in the tax year in question.
  • The Limitation Act 1980 applies to NIC and places a limit of 6 years for HMRC to take action to recover unpaid NIC.

Excel Computer Systems PLC provided fuel cards to employees with Company cars:

  • Excel’s fuel card policy required all employees to reimburse the company for the private element of fuel purchases.
    • By the end of the tax year they were to email details of their mileage for the year to the company accountant, split between business and private miles.
    • The company would then raise an invoice for private mileage to be paid by return.
  • Excel considered they had suitable systems in place to ensure no private fuel was provided so did not report any benefit on their employees’ P11Ds.
  • An HMRC employer compliance check showed that for 2005/06 to 2010/11 (excluding 2007/08), no payments were made by employees for any private miles incurred during the year until at least 30 days after the end of the tax year; in some cases mileage was not submitted and invoices were not raised until June and there were payments made in October.
  • In May 2016 HMRC issued Excel with section 8 decisions for class 1A NIC covering five years and totalling £47,961. Excel appealed.
  • HMRC lodged claims in the county court to protect the 2005/06 and 2006/07 tax years. They did not protect 2008/09 believing their rights were preserved for this year as Excel had made a payment on account in May 2015. Excel held that HMRC were time barred for this tax year.

The FTT upheld the appeal in respect of 2008/09 and agreed HMRC were time barred; there was no agreement or contract between HMRC and Excel in May 2015 and the amount paid was not specifically in respect of the s8 NIC decision notice for 2008/09.

The FTT dismissed the appeal in respect of the class 1A for 2009/10 and 2010/11, It gave Excel 21 days to provide evidence to show that the amounts assessed for 2005/06 and 2006/07 were not calculated to HMRC’s best judgement due the amounts involved and the length of time which had passed since these years.

  • They distinguished the Apollo Fuels case relied on by Excel on its facts and held that the provision of fuel was a benefit to the employees; the private fuel was free to them until such time as they chose to pay their employer for it.
  • S151 had not been complied with nor had the HMRC concession (in HMRC manuals) which allowed 30 days after the end of the tax year for the making good of private miles. The company’s fuel card policy, did not require employees to meet the conditions of s151 by making good in the tax year, as a result the concession did not apply to them.

The change to s151 in 2017 providing a specific date for making good of 6 July indicates that the previous requirements were impractical but at least 20% of Excel employees would still have failed to meet the deadline under the new rules.


Making good benefits in kind 

Company cars 


Excel Computer Systems PLC v HMRC [2018] TC06561