As with most other taxable benefits, Class 1A NICs liability
arises on the benefit of a provided van if all the conditions in
NIM13021 are satisfied. One of the
conditions is that there must be an amount of general earnings
chargeable to income tax under ITEPA 2003 (before 6 April 2003
– emoluments chargeable to income tax under Schedule E).
Where the benefit of a provided van attracts a charge to
income tax under the van benefit rules, section 154 of ITEPA 2003
(before 6 April 2003 – section 159AA of ICTA 1988), Class 1A
NICs are payable on the cash equivalent of the benefit of providing
the van, i.e. the amount of general earnings chargeable to income
tax under ITEPA 2003 (before 6 April 2003 – emoluments
chargeable to income tax under Schedule E). The cash equivalent of
the benefit is calculated in accordance with section 155 of ITEPA
2003 (before 6 April 2003 – section 159AA and schedule 6A of
ICTA 1988). For guidance on the income tax position see EIM22050
and EIM22700 (before 6 April 2003 – see SE22050).
Definitions used in relation to vans, including those used
to define a van and a heavier commercial vehicle, are the same for
both tax and Class 1A NICs. These definitions are provided in the
Employment Income Manual (before 6 April 2003 - Schedule E
Manual).
Before 6 April 2000, Class 1A NICs liability could not arise on the provision of a van because it was restricted to car and car fuel benefits.
For guidance on the NICs liability of
