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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: Types of motoring expenses

General explanation covering types of motoring expenses and liability for NICs

Background information

Many employers pay motoring expenses to employees who are required to use their owncars for business purposes. Some employers may pay motoring expenses to employees providedwith company cars or leased cars. Most employers pay for motoring expenses for businesstravel only but some may also pay expenses for private travel.

The NICs liability for such motoring expenses depends on the circumstances under whichemployers make payments to employees.

  • See NIM05810 for motoring expenses paid to employees who use their own cars for business and or non-business purposes.
  • See NIM16060 and NIM16175 for motoring expenses where the car is provided, for example a company car.

List of common methods for paying motoring expenses

Motoring expenses can include the employer

  • making mileage allowance payments – for more details see NIM05816
  • making regular lump sum payments – for more details see NIM05817
  • making one off lump sum payments – for more details see NIM05818
  • allowing the employee to use credit cards and/or fuel agency cards – for more details see NIM05819
  • meeting the employee’s pecuniary liability – for more details see NIM05820
  • making a payment in kind – for more details see NIM05825
  • making payments under an Employee Car Ownership Scheme (ECOS) - for more details see NIM05870