NIM16031- Class 1A NICs: Special Class 1A cases: Cars provided for private use: ESCA71 (Company cars: Family members and shared use): Effect on Class 1A NICs

Regulation 33, SS(C)R 2001

ESC A71 (company cars: family members and shared cars) provides a concession to the normal rules about the tax treatment of cars provided to family members. The equivalent rule for Class 1A NICs purposes is contained in regulation 33, SS(C)R 2001.

In essence ESC A71 removes a car benefit charge under the normal family member rules for a car provided to a family member, if:

• the family member is already subject to a car benefit charge on that car or
• the conditions set down in the middle part of ESC A71 are satisfied.

Detailed guidance on the conditions which must be satisfied to allow ESC A71 to operate is provided at SE23070.

Materially, there is no difference in the application of regulation 33 for Class 1A NICs and ESC A71 for tax. The conditions which must be satisfied to allow this family member concession to operate for tax purposes apply equally to regulation 33 for Class 1A NICs.

The main difference, however, is that for Class 1A purposes this concession is a substantive rule within the legislation covering Class 1A NICs. This means that there is a right of appeal against any decision not to apply regulation 33.

Where an employer appeals against a decision not to apply this Class 1A NICs exemption, you should refer the case to Personal Tax (Technical), Longbenton, via the TSM, with a full report, in accordance with ADM6.109.