Some employers pay regular lump sums, often monthly amounts,
aimed at reimbursing their employees for the business proportion of
the standing costs of the car. Providing the facts show that the
payments are paid for the
use of the employee’s privately owned car
vehicle, lump sums such as these will fall within the definition of
relevant motoring expenditure (RME).
Care should be taken to ensure any lump sums paid are in
recognition of the use of the car. Lump sums paid for any other
reason, for example sums in recognition of an employee surrendering
entitlement to a company car or in respect of ownership, are not
RME.
Regular lump sums for the use of a car for business travel
are commonly paid to certain Local Authority and Health Authority
workers. For more information about motoring expenses paid to Local
Authority and Health Authority workers see
NIM05850 and
NIM05851 respectively.
Do not automatically accept that, because an employee incurs
costs using their car for business travel, a regular lump sum
payment paid by the employer is RME. You should examine the facts
to establish the true nature of the payment. For more information
about determining whether regular lump sum payments are RME see
NIM05845 to
NIM05849.
