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HMRC internal manual

National Insurance Manual

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Class 1A National Insurance contributions: Special Class 1A NICs cases: Cars provided for private use: More than one car provided: Special rules for tax years up to 2001/2002

Regulation 34, SS(C)R 2001 (revoked by regulations 2, 6, 36 and Schedule 1 of the Social Security (Contributions, Categorisation of Earners and Intermediaries) (Amendment) Regulations 2004 SI 2004 No 770)Specific rules apply to the calculation of Class 1A NICs where two or more cars are made available at the same time for private use in tax years up to and including the 2001/2002 tax year.

Two or more cars provided at the same timeThese rules apply if two or more cars are provided at the same time for private use because of

  • any one employed earner’s employment;
  • two or more employed earner’s employments under the same employer; or
  • two or more employed earner’s employments under different employers who are associated.

General ruleWhere two or more cars are provided under any of the circumstances described above, Class 1A NICs are calculated on the cash equivalent of each car using the normal tax rules. This means that the available reductions for business travel which apply to the first and second car apply equally to Class 1A NIC calculations, paragraph 4 of Schedule 6 of ICTA 1988 refers. See SE23324 for guidance.

Specific rulesWhere two or more cars are provided at the same time, under any other circumstances, the general rule above does not apply. This means that where an employee is provided with two or more cars from wholly separate employments, each employer is liable for Class 1A NICs for the car they provide using the normal business mileage reductions for each car.

Employers treated in associationFor the purposes of these rules, two or more employers are treated as associated if

  • they are carrying on business in association, see NIM10010; or
  • one employer has control of the other or others, or any person has control of both or all of them.Except in relation to an employer which is a partnership, the term control means, in relation to an employer which is a body corporate, the power to secure that the employer’s affairs are conducted in accordance with the wishes of the person concerned. The power being exercisable by

  • means of the holding of shares or the possession of voting rights in, or in relation to, that employer, or
  • virtue of any powers conferred by the articles of association or other document regulating that or any other employer.In relation to an employer which is a partnership, ‘control’ means having the right to a share of more than one-half of the assets, or of more than one-half of the income, of the partnership.