NIM16179 - Class 1A National Insurance contributions: Special Class 1A NICs cases: Fuel for use in a provided car: Payment of a round sum allowance

Sections 3 and 10 of the Social Security Contributions and Benefits Act 1992 (SSCBA 1992)

Part 8 of Schedule 3 to the Social Security Contributions Regulations 2001 (SSCR 2001) (SI 2001 No 1004)

Section 149 of Income Tax Earnings and Pensions Act 2003 (ITEPA 2003)

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. Section 10(1)(a) of SSCBA 1992 not satisfied so no Class 1A NICs due, see NIM13070. Paragraph 9 Part 8 Schedule 3 SSCR 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. 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. 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.