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HMRC internal manual

National Insurance Manual

HM Revenue & Customs
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Class 1 NICs: Expenses and allowances: Mileage allowances: Rules before 6 April 2002: Employer restricts the amount of business mileage paid


Under the qualifying business travel rules introduced from 6 April 1998 and which applyuntil 5 April 2002, all reasonable business travel expenses incurred are excluded fromNICs, in line with the equivalent income tax treatment. This includes payments forbusiness mileage. The question of NICs liability only arises if an employer does more thanreimburse the employee the actual business expense incurred, see NIM05708.

Guidance on qualifying business travel is included at NIM06240.

Some employers restrict the amount of business mileage that they can pay to theiremployees under the new qualifying travel rules. This normally occurs where an employerrequires an employee to deduct from his business mileage his normal home to officemileage.

Where this occurs, the full amount of the qualifying business mileage that could have beenpaid can be taken into account in determining whether there is a NICs liability on themileage rate paid, see NIM05730 for examples.

Employers are not compelled to use the additional mileage that they could have paid underthe qualifying travel rules in their calculations.