The December 2023 edition of HMRC’s Employer Bulletin suggests that HMRC has now accepted the Upper Tribunal’s decision in Laing O’Rourke Services Ltd v HMRC [2023] UKUT 155 (TCC) that ‘relevant motoring expenditure’ includes potential and anticipated use of a vehicle as well as actual use, for the purposes of the class 1 NICs disregard from earnings.
HMRC confirms: ‘This will affect those who receive fixed sum car allowance payments where those payments are made in anticipation or potential use of a qualifying vehicle. Where car allowance payments have been or will be made for use of a qualifying vehicle, they may now benefit from a higher amount of disregard because the amounts classed as Relevant Motoring Expenditure could be higher.’
The revised interpretation means that refund claims can be made where NICs have been paid on car allowance payments but were not due. The bulletin sets out some practical points for employers on claiming refunds, and HMRC has said it will issue ‘further communications’ when its general guidance has been updated to reflect the change.
An HMRC spokesperson had also previously confirmed that HMRC would not be appealing the UT decision (see Taxation, 7 September 2023).
The bulletin also covers:
Autumn Statement 2023 NICs changes;
set-off of taxes already paid against a deemed employer PAYE liability under the off-payroll working rules from 6 April 2024;
registering to payroll benefits from 6 April 2024;
new guidance for employment businesses which engage with umbrella companies; and
off-payroll working rules new ‘Guidelines for compliance’.
The December 2023 edition of HMRC’s Employer Bulletin suggests that HMRC has now accepted the Upper Tribunal’s decision in Laing O’Rourke Services Ltd v HMRC [2023] UKUT 155 (TCC) that ‘relevant motoring expenditure’ includes potential and anticipated use of a vehicle as well as actual use, for the purposes of the class 1 NICs disregard from earnings.
HMRC confirms: ‘This will affect those who receive fixed sum car allowance payments where those payments are made in anticipation or potential use of a qualifying vehicle. Where car allowance payments have been or will be made for use of a qualifying vehicle, they may now benefit from a higher amount of disregard because the amounts classed as Relevant Motoring Expenditure could be higher.’
The revised interpretation means that refund claims can be made where NICs have been paid on car allowance payments but were not due. The bulletin sets out some practical points for employers on claiming refunds, and HMRC has said it will issue ‘further communications’ when its general guidance has been updated to reflect the change.
An HMRC spokesperson had also previously confirmed that HMRC would not be appealing the UT decision (see Taxation, 7 September 2023).
The bulletin also covers:
Autumn Statement 2023 NICs changes;
set-off of taxes already paid against a deemed employer PAYE liability under the off-payroll working rules from 6 April 2024;
registering to payroll benefits from 6 April 2024;
new guidance for employment businesses which engage with umbrella companies; and
off-payroll working rules new ‘Guidelines for compliance’.
