NIM16050 - Class 1A NICs: Special Class 1A NICs cases: Cars provided for private use: Leased cars and leasing arrangements

Liability for NICs on leased cars or cars made available under leasing arrangements will depend upon who is actually leasing the car. If:

• a car is leased by the employer and he makes the car available to the employee, a Class 1A NICs liability will arise providing the car is taxable as an emolument under Schedule E
• a car is leased by the employee through independent arrangements, so that the employee has not obtained the car on those terms and conditions by reason of his employment, see SE23062, there is no Class 1A NICs liability. There may, however, be a Class 1 NICs liability if the employer pays the leasing costs for the employee or reimburses the employee the leasing costs, see NIM02270.