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HMRC internal manual

National Insurance Manual

Class 1 NICs: Expenses and allowances: Car, motor cycle and cycle parking fees: Parking fees or congestion charges incurred in connection with business travel

Regulation 25 and paragraph 3 of Part VIII and paragraph 9 of Part VIII of Schedule 3 to the Social Security (Contributions) Regulations 2001

There is no liability for NICs on parking fees an employee incurs in connection with business travel, but the employer must keep a record of individual expenditure in order to confirm the amounts involved in relation to individual employees. If the employer only has evidence relating to part of the expenditure NICs will be due on the balance.

Prior to April 1998 reimbursements of car, motor cycle and cycle parking fees were excluded from NICs by virtue of regulation 19(4)(b) of the Social Security (Contributions) Regulations 1979 [now regulation 25 and paragraph 9 of Part VIII of Schedule 3 to the Social Security (Contributions) Regulations 2001]. This was on the basis that they were “specific and distinct payment of expenses which an employed earner actually incurs in carrying out his employment”. See NIM05020 for general guidance about this legislation.

With effect from 1 April 1998, however, you should first consider whether payments of, or reimbursements in connection with, parking fees can be excluded from liability for NICs because they are necessary travelling expenses. See NIM06250 for general guidance regarding necessary travelling expenses. The relevant legislation is regulation 25 and paragraph 3 of Part VIII of Schedule 3 to the Social Security (Contributions) Regulations 2001.

In the event that the necessary travelling expenses rules do not allow the parking fees to be excluded from NICs, you should apply the “specific and distinct” expenses rule (as outlined above).


On 2 July 2001, a computer engineer attends a client’s premises to effect a necessary repair to equipment.

He travels to the area by car, and pays to park his car in a nearby car park because the client does not have parking facilities.

His employer reimburses the cost of parking.

This reimbursement will not be liable for NICs as it is a necessary travelling expense incurred by the employee in connection with travelling to a place he has to attend in the performance of the duties of his employment.

See NIM05625 for guidance regarding parking fees incurred at the permanent workplace.

Congestion Charges

Various cities now have a zone within which a congestion charge applies. If in the course of travel to a temporary workplace a congestion charge applies, this may be reimbursed to the employee or paid to the relevant authority directly by the employer. Where a congestion charge is incurred as part of attendance at the normal workplace (ordinary commuting) then NIM05635 below should be considered.