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HMRC internal manual

National Insurance Manual

From
HM Revenue & Customs
Updated
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Class 1A National Insurance contributions: Special Class 1A NICs cases: Vans: General

Position from 6 April 2000As with most other taxable benefits, Class 1A NICs liability arises on the benefit of a provided van if all the conditions in

NIM13021 are satisfied. One of the conditions is that there must be an amount of general earnings chargeable to income tax under ITEPA 2003 (before 6 April 2003 – emoluments chargeable to income tax under Schedule E).

Where the benefit of a provided van attracts a charge to income tax under the van benefit rules, section 154 of ITEPA 2003 (before 6 April 2003 – section 159AA of ICTA 1988), Class 1A NICs are payable on the cash equivalent of the benefit of providing the van, i.e. the amount of general earnings chargeable to income tax under ITEPA 2003 (before 6 April 2003 – emoluments chargeable to income tax under Schedule E). The cash equivalent of the benefit is calculated in accordance with section 155 of ITEPA 2003 (before 6 April 2003 – section 159AA and schedule 6A of ICTA 1988). For guidance on the income tax position see EIM22050 and EIM22700 (before 6 April 2003 – see SE22050).

Definitions used in relation to vans, including those used to define a van and a heavier commercial vehicle, are the same for both tax and Class 1A NICs. These definitions are provided in the Employment Income Manual (before 6 April 2003 - Schedule E Manual).

Position before 6 April 2000Before 6 April 2000, Class 1A NICs liability could not arise on the provision of a van because it was restricted to car and car fuel benefits.

Further NICs guidanceFor guidance on the NICs liability of

  • motoring expenses (excluding fuel) connected with a van see NIM16382
  • fuel provided for a van, by whatever method, for example, credit/debit card, cash reimbursements, non-cash vouchers, etc., see NIM16385.