Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

National Insurance Manual

From
HM Revenue & Customs
Updated
, see all updates

Class 1 NICs: Expenses and allowances: Mileage allowances: Rules before 6 April 2002: Civic dignitaries

 

Civic dignitaries are elected office holders and for NI purposes are classed as LocalAuthority (LA) employees, see NIM05640. Liability for Class 1NICs arises if a civic dignitary receives a payment of earnings.

Mileage allowances paid to civic dignitaries are treated for NICs in the same manner asany other mileage allowances paid by other employers. Class 1 NICs are due on:

  • reimbursed private mileage
  • any amount which cannot be identified as a business expense or is regarded as a profit element within a business expense.

The rules and methods for determining whether any Class 1 NICs liability arises onmileage allowance payments made by LA employers to civic dignitaries are the same as forany other employer. See NIM05708 for mileage allowances and NIM05720 for lump sum payments.

Certain civic dignitaries can be classed as ‘essential car users’ and receive a:

  • mileage allowance and
  • a lump sum payment.

Lump sum payments paid to civic dignitaries are treated for NICs in the same manner asany other lump sum payment paid by LAs, see NIM05740.