Taxation logo taxation mission text

Since 1927 the leading authority on tax law, practice and administration

Lumped it? Like it!

02 November 2010 / John Hill
Issue: 4279 / Categories: Comment & Analysis , Employees , Income Tax
JOHN HILL reports on an important case for employers that pay car allowances

A recent First-tier Tribunal case could see a rush of employers claiming back thousands of pounds of National Insurance over the coming months.

In Total People Ltd (TC661) the tribunal ruled that employer National Insurance contributions were not due on cash lump sums paid as part of a motoring package.

The grounds were that the sums were reimbursed motoring expenses rather than additional earnings therefore opening the doors for new claims from other employers which offer similar car allowances to employees.

In the case the payments were made under two options: either as a straightforward mileage allowance at 40 pence per mile; or smaller allowances of 12 and 13 pence per mile plus an annual lump sum paid in monthly instalments.

The case revolved around whether or not the annual lump sums were regarded as earnings or not.

The relevant legislation is Social Security (Contributions)...

If you or your firm subscribes to Taxation.co.uk, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.

back to top icon