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HMRC internal manual

National Insurance Manual

Class 1A National Insurance contributions: Special Class 1A cases: Cars provided for private use: Cars provided to family or household members

A benefit provided for a member of an employee’s family or household, whether by his employer or someone else, is chargeable to income tax under ITEPA 2003 if it is provided by reason of his employment.

As with other benefits which attract Class 1A NICs liability, the provision of a car for the private use of an employee’s or director’s family or household is treated in the same manner as it is for tax.

Where a tax liability arises on a car provided to a member of an employee’s or director’s family or household, an equivalent Class 1A NICs liability arises on the employer.

Detailed guidance on the tax treatment of cars provided to family members is provided at EIM23061 and EIM23070 to EIM23074 (before 6 April 2003 – see SE23061 to SE23070). That guidance applies equally to Class 1A NICs.

See NIM16031 about cars shared by a member of an employee or director’s family or householder.