A benefit provided for a member of an employee's family or
household, whether by his employer or someone else, is chargeable
to income tax under ITEPA 2003 if it is provided by reason of his
employment.
As with other benefits which attract Class 1A NICs
liability, the provision of a car for the private use of an
employee’s or director’s family or household is treated
in the same manner as it is for tax.
Where a tax liability arises on a car provided to a member
of an employee’s or director’s family or household, an
equivalent Class 1A NICs liability arises on the employer.
Detailed guidance on the tax treatment of cars provided to
family members is provided at EIM23061 and EIM23070 to EIM23074
(before 6 April 2003 – see SE23061 to SE23070). That guidance
applies equally to Class 1A NICs.
See
NIM16031 about cars shared by a member
of an employee or director’s family or householder.
