If an employer pays a round sum allowance (RSA) in respect of
fuel used in a provided car, the normal rules for assessing Class 1
NICs on RSAs apply, see
NIM06160.
The following tables show the NICs position where a RSA is
paid in respect of fuel for use in a provided car.
| Employer pays a round sum allowance for | NICs liability |
| Business mileage only and the rate is reasonable | No NICs liability – No fuel benefit charge arises under section 149 of ITEPA 2003 (before 6 April 2003 – section 158 of ICTA 1988). Section 10(1)(a) of SSCBA 1992 not satisfied so no Class 1A NICs due, see NIM13070. Paragraph 9 Part 8 Schedule 3 SS(C)R 2001 satisfied so no Class 1 NICs due, see NIM05020. |
| Business mileage only but the rate paid is excessive | Class 1 NICs due on the
profit. No Class 1A NICs due on the round sum allowance, whether or
not a fuel benefit charge arises under section 149 of ITEPA 2003
(before 6 April 2003 – section 158 of ICTA 1988). Profit
element is earnings under section 3(1)(a) SSCBA 1992, see
NIM02010.
Amount for business expenses disregarded from earnings by paragraph 9 Part 8 Schedule 3 SS(C)R 2001, see NIM05020. Section 10(1)(c) SSCBA 1992 is not satisfied, see NIM13090. |
| Non-business mileage | Class 1 NICs due on full amount. No Class 1A NICs due whether or not fuel benefit charge arises under section 149 of ITEPA 2003 (before 6 April 2003 – section 158 ICTA 1988). All of rates are profit so are earnings under section 3(1)(a) SSCBA 1992, see NIM02010. Section 10(1)(c) SSCBA 1992 is not satisfied, see NIM13090. |
