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HMRC internal manual

National Insurance Manual

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Class 1 NICs: Expenses and allowances: Call-out expenses

Regulation 25 and paragraph 3 of Part VIII of Schedule 3 to the Social Security (Contributions) Regulations 2001

Called-out to normal workplace

On occasions an employee may be called back to work unexpectedly or in an emergency outside of normal business hours. By way of reimbursement the employer will generally give the employee an expense payment to cover the cost of travel.

Such a payment is earnings for NICs purposes, however, regulation 25 and paragraph 3 of Part VIII of Schedule 3 to the Social Security (Contributions) Regulations 2001 provide for necessary travelling expenses (see EIM32005 onwards, previously SE32005 onwards) to be disregarded when calculating earnings for NICs purposes.

Where travel expenses paid when an employee is called back to work would in normal circumstances not qualify for exclusion from NICs then they will not qualify just because the journey was made in response to an emergency. In such circumstances the expenses will simply be expenses of ordinary commuting if the employee is called-out to the permanent workplace, see EIM32240, previously SE32240. They will therefore not be an expense capable of being excluded from NICs.

Example

A bank has an ATM (‘hole in the wall’ machine). The machine breaks down at 8 p.m. and the bank manager calls out one of the bank’s employees to return to the bank to investigate and correct the problem.

The bank manager will only call out an employee who has agreed to add their name and home telephone number to a call out list. An agreement of this kind represents a term of the employee’s contract of employment and any payment made in connection with that agreement will therefore be earnings.

Once added to the list an employee can expect to be called out, and any payment by the employer to reimburse the employee for travelling expenses must be included in gross pay.

Paragraph 3 of Part VIII of Schedule 3 to the Social Security (Contributions) Regulations 2001 does not provide for ordinary commuting expenses to be disregarded, therefore the payment of travelling expenses in respect of the return to the normal workplace will not be able to be excluded from NICs.

The exceptional case

In the rare cases where the employee has to perform duties at home and also while travelling to an emergency at a permanent workplace the cost of the travel can be excluded. (See EIM10040 and SE32245 for further guidance and SE32246 for an example) This will only be appropriate where

  • the employee has to give advice on handling the emergency before starting the journey, and
  • responsibility for those aspects appropriate to the employee’s duties is accepted from that time, and
  • the employee has a continuing responsibility for the emergency while travelling to the workplace.

Called-out to a temporary workplace

If the employee is called-out to a workplace that is a temporary workplace (see EIM 32075, previously SE32075) then the payment of travelling expenses incurred in being called out will be able to be excluded from NICs. For instance, if in the above example the employee was called-out to attend to an autoteller malfunction at a branch of the bank at which they do not work regularly, then no NICs would be due on the payment.

For general guidance on travelling expenses see NIM06240.