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HMRC internal manual

National Insurance Manual

Class 1 NICs: Expenses and allowances: Mileage allowances: rules before 6 April 2002: Methodist ministers


The Methodist Church pays motor allowances to its ministers and deaconesses who usetheir own cars for business purposes.

Until April 1996 the Methodist Church operated a complex motoring allowance scheme. Ingeneral, NICs liability on these mileage allowances was assessed on the total annualallowances, averaged over total business miles travelled.

From 6 April 1996, the Methodist Church:

  • abolished its previous motoring allowances scheme; and
  • since then has reimbursed motoring costs by way of a straight forward single mileage rate for all cars, regardless of engine size.

For the period to 5 April 2002, the mileage rate paid by the Methodist Church is theaverage of the two middle bands of the Inland Revenue’s Authorised Mileage Rates(AMR).

No Class 1 NICs liability arises on mileage allowances paid to Methodist Ministers whichare based on the average of the Inland Revenue’s ‘up to 4,000 miles’ AMRs.This applies irrespective of the number of business miles travelled and, for tax years upto and including 2001/2002, the car’s engine size.

For further information on the general NICs treatment of mileage allowances see NIM05708.