Potted history of relevant motoring expenditure cases

Key points

• Many companies submitted protective claims arguing that employees’ car allowances were not earnings.
• HMRC said there had to be a direct link between the amount of usage and the level of the car allowance for it to be relevant motoring expenditure (RME).
• The tribunal in Willmott Dixon agreed that the RME definition was drawn widely to catch not only actual use but also anticipated use.
• The Upper Tribunal in the combined Laing/Willmott Dixon appeals found for the taxpayers.

The story begins in 2001 when the government replaced the old fixed profit car scheme rules with the new (now 22 year old) approved mileage allowance payment (AMAP) rules. HMRC refers to these in its manuals as the authorised mileage allowance payments – why HMRC has constantly to change words used in statute I really do not know but by changing words it inevitably gives rise to confusion or conflict....