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HMRC internal manual

National Insurance Manual

From
HM Revenue & Customs
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Class 1 NICs: Expenses and allowances: Mileage allowances: Rules before 6 April 2002: Rates paid are greater than authorised rates - employer claims no profit included

Where an employer’s mileage rate for business mileage for periods to 5 April 2002is greater than the “up to 4,000 miles” Inland Revenue Authorised Mileage Rate(AMR), the profit will normally attract a Class 1 NICs liability, see NIM05715.

Exceptionally, however, an employer may pay a rate above the AMR and argue that he hasevidence to support that the mileage rate he pays is an accurate reflection of thebusiness expenses actually incurred by his employees in using their privately owned cars.

Where this is alleged, check the evidence that the employer provides, bearing in mind theexpenses rule contained in paragraph 3 and 9 of Part 8 of Schedule 3 to the 2001Regulations, see NIM05020. If it is accepted that the mileagerate does no more than reimburse the employee the specific and distinct business expenseincurred, there will be no NICs liability on any part of the employer’s mileage rate.These cases will be rare. (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)