Before 6 April 1995, it was sometimes argued, that Class 1A NICs
were not payable on cars provided to employees under cash
alternative schemes.
To remove any uncertainty, section 157A ICTA 1988 - was
introduced from 5 April 1995 (from 6 April 2003 – section 119
of ITEPA 2003). Section 119 of ITEPA 2003 ensures that a section
120 ITEPA 2003 car benefit charge operates, in cases where an
employer offers a cash alternative to a company car but the offer
is not taken up. The effect of the legislation also served to
confirm that where a cash alternative was offered, but not taken,
Class 1A NICs were due.
From 6 April 1995, the NICs due on cars provided under a
cash alternative scheme depend upon what the employee actually
receives.
If the employer provides
