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HMRC internal manual

National Insurance Manual

From
HM Revenue & Customs
Updated
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Class 1 NICs: Expenses and allowances: Motoring expenses (including mileage allowances) paid on or after 6.4.02: Relevant motoring expenditure - regular lump sum payments

Payments that are relevant motoring expenditure: Regular lump sum payments –Applies from 6 April 2002

Some employers pay regular lump sums, often monthly amounts, aimed at reimbursing theiremployees for the business proportion of the standing costs of the car. Providing thefacts show that the payments are paid for the use of the employee’sprivately owned car vehicle, lump sums such as these will fall within the definition ofrelevant motoring expenditure (RME).

Care should be taken to ensure any lump sums paid are in recognition of the use of thecar. Lump sums paid for any other reason, for example sums in recognition of an employeesurrendering entitlement to a company car or in respect of ownership, are not RME.

Regular lump sums for the use of a car for business travel are commonly paid to certainLocal Authority and Health Authority workers. For more information about motoring expensespaid to Local Authority and Health Authority workers see NIM05850 andNIM05851 respectively.

Do not automatically accept that, because an employee incurs costs using their car forbusiness travel, a regular lump sum payment paid by the employer is RME. You shouldexamine the facts to establish the true nature of the payment. For more information aboutdetermining whether regular lump sum payments are RME see NIM05845 toNIM05849.