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HMRC internal manual

National Insurance Manual

HM Revenue & Customs
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Class 1 NICs: Expenses and allowances: Motoring expenses (including mileage allowances) paid on or after 6.4.02: Introduction and legislation

Background to the NICs motoring expenses scheme operative from 6 April 2002 - SocialSecurity (Contributions) (Amendments) Regulations 2002, SI 2002 No 307


The Inland Revenue introduced a statutory scheme for dealing with NICs liability onmotoring expenses paid to employees using their own vehicles for business travel in theabove regulations laid on 13 February 2002.

Effective date

The scheme is effective from 6 April 2002 and replaced the previous administrativearrangements used before 6 April 2002.

See NIM05708 for further guidance on the rules to use forperiods before 6 April 2002.

The equivalent scheme for income tax

There is an equivalent scheme for tax but, while the tax and NICs schemes were alignedas much as possible, they differ in various ways. You should not assume that somethingthat is true for one scheme is also true for the other.

Guidance on the income tax scheme begins at EIM31205.

Effects of the NICs motoring expenses scheme

The rules deal with how HMRC treat motoring expense payments relating to privatelyowned vehicles from 6 April 2002. For more information see NIM05802onwards.

The scheme also deals with the provision of mileage allowance payments paid to employeeswho use their own cycles for business travel. For more information about how the NICsmotoring expenses scheme applies to cycles see NIM05865.

Exclusions from the NICs motoring expenses scheme

The new rules do not change how HMRC will treat motoring expense payments: