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Big wheel keep on turnin’
Key points
- In Laing O’Rourke it was the retroactive reclassification of car allowances as ‘not earnings’ that HMRC objected to.
- The Donnelly and Williamson principle would indicate that car allowances should not be earnings at all.
- The judge in WD ruled that no NI was due because the car allowance was relevant motoring expenditure.
- WD views RMEs as being a catch all that brings things that would otherwise not have been earnings back into the earnings net.
- HMRC accepts that for income tax purposes drivers can claim tax relief up to 45p a mile but argues that the NIC reliefs and NIC legislation are different and that no NIC relief is due – other than in rare circumstances.
- In light of SI 2016/352 any company or taxpayer that has not already submitted a protective claim to recover NICs on business mileage should do so.
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