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HMRC internal manual

National Insurance Manual

HM Revenue & Customs
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Class 1 NICs: Earnings of employees and office holders: Company credit cards

Directors and some employees often use company credit cards or charge cards to pay business expenses such as hotel bills, air travel, or meals. They may also use them to buy goods on behalf of the company.

There is no Class 1 NICs liability if:

  • the expenses are allowable business expenses (see NIM05020); or
  • goods and services are purchased and

If any of the last three points above are not met, a Class 1 NICs liability will arise in connection with the goods/services purchased. This is because in that event, the purchase will not have been made on behalf of the company, and the position will rather be that the employee has arranged a purchase in a private capacity.  In such circumstances, if the employer pays the bill and does not seek reimbursement from the director/employee of the cost of the goods/services, or that part of the cost which relates to the private use where there is both private and business use, then Class 1 NICs will be due on the amount which relates to private use. The liability will arise at the time the employee makes the purchase.

See also NIM02190 regarding the purchase of goods and services by directors and other employees.

    • prior authority was given to purchase the goods/services, and
    • the director/employee explained in advance that the purchase was being made on the company’s behalf, and
    • the supplier accepted that the purchase was being made on the company’s behalf.