SE65820 - Tax treatment of local authority officials and employees: payments for using own car for work - centrally negotiated National Joint Council rates

Make sure you are familiar with the material at SE65815 before reading this page.

The centrally negotiated National Joint Council rates provide for payments for business travel to be made to

• casual users at a given rate per mile
• essential users by means of a lump sum plus a given rate per mile.

(Note that local authorities which have chosen to pay mileage allowances under their own schemes are also likely to recognise “casual” and “essential” users. You need to compare the actual rates paid for particular car engine sizes in order to work out whether or not the centrally agreed rates are being used).

Under the centrally agreed schemes the given rate per mile varies according to car engine size. The following information relates to the present scheme which has been in operation since 1 October 1993.

Unless the local authority is paying under the “restricted payments” scheme (see below) or is in Scotland (see below) engine sizes are divided into the following classes

Certain employees had protected rights under the old scheme until 31 March 1996.

Under the “restricted payments” scheme two classes of engine size are used.

In Scotland, local authority employers who pay at centrally approved rates use different categories of engine size. In the past they used two categories of engine size – but not the same ones as in the “restricted payments” scheme. But they are now paying a single level of mileage rate, irrespective of engine size. Centre 1 Employers’ Office obtain details of the centrally agreed mileage allowances local authority employers in Scotland.

Important note:

Both the statutory rules and the administrative arrangements for dealing with mileage payments are replaced by the new statutory scheme for approved mileage allowance payments (AMAPs) that applies from 2002/03 onwards. Full guidance on the AMAP scheme is at SE31250 onwards.

Rules up to and including 2001/02

Depending on the costs incurred by the individual employee, and/ or the engine size of the car used, the allowances may exceed the business proportion of the expenses of running a car, or the Inland Revenue’s authorised mileage rates for that particular car (see SE31840 onwards). In these circumstances you will not be able to agree a dispensation (see SE30051 onwards) for motor mileage allowances, and therefore the employer will need to make end of year returns. See SE30200 onwards for details of the options open to employers for reporting mileage allowances not covered by a dispensation. Most local authority employers use either the Fixed Profit Car Scheme profit tables system of reporting or else the Car Allowances Enhanced Reporting Scheme.

Where the Car Allowances Enhanced Reporting Scheme is used, follow the guidance at SE30200 onwards. Where the Fixed Profit Car Scheme profit tables system is used for the taxation of the profit from the nationally negotiated car allowances see SE65825 onwards.