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HMRC internal manual

National Insurance Manual

Class 1A National Insurance contributions: Liability for Class 1A NICs before 6 April 2000: Method of calculating Class 1A NICs

For tax years 1991/1992 to 1999/2000, Class 1A NICs were calculated by reference to the tax rules for establishing the cash equivalent of car and car fuel benefits.

Cars provided for private useFor tax years:

  • 1991/1992 to 1993/1994 the car benefit charge was calculated using a system of scale charges
  • 1994/1995 onwards the car benefit charge is calculated using a percentage of the list price of a car.
  • Guidance on calculating the cash equivalent is provided at SE23001 onwards. That guidance applies equally to the calculation of the car benefit charge for Class 1A NICs purposes and continues to be the method used to calculate the amount of Class 1A NICs due on car benefits provided after 6 April 2000, see NIM16001.

Fuel provided for private use in a provided carFor tax years 1991/1992 onward, the benefit of private fuel for use in a car which attracts a car benefit charge, is calculated using scale charges.

Guidance on fuel benefits is provided at SE23750 onwards. That guidance applies equally to the calculation of the cash equivalent of fuel benefits for Class 1A NIC purposes.

Calculation of Class 1A NICs Once the cash equivalent figures had been determined, Class 1A NICs were calculated as a set percentage of each cash equivalent figure. The relevant Class 1A NIC percentage rates are shown at


For tax years up to and including 1999/2000, Class 1A NICs were calculated separately on each cash equivalent figure and the separate calculations added together to arrive at the total amount of Class 1A NICs due.

Special Class 1A NIC rulesSpecial Class 1A NIC rules applied in certain cases where cars were provided

  • under a cash alternative scheme
  • to disabled drivers
  • to family members
  • by a third party
  • under a leasing arrangement
  • to more than one employee or by more than one employer.Guidance on these special rules is provided at

NIM16001 onwards.