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HMRC internal manual

National Insurance Manual

HM Revenue & Customs
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Class 1 NICs: Expenses and allowances: Civic dignitaries' and Councillors’ allowances: Civic dignitaries’ entertainment expenses

However, if the payment is for a business function where the costs are supported by itemised bills, the amount can be excluded from NICs as a payment incurred in carrying out the employment. This will apply, for example, if the mayor has receipts for the amount spent on a business lunch hosted for visiting officials.