National insurance motor mileage reclaim case to be heard by Court of Appeal

The Upper Tribunal has granted permission to Grant Thornton UK to take a national insurance contribution (NIC) reclaim case to the Court of Appeal.

The case, on behalf of apprenticeships and workplace-based training supplier Total People, relates to a NIC refund claim based on the difference between HM Revenue and Customs’ (HMRC) 40p-per-mile allowable rate and the 12p-per-mile paid by the employer, plus an additional lump sum paid to the employees for using their private cars on business.

Total People was successful in its appeal to the First-tier Tribunal in August 2010 but, in HMRC’s further appeal, the Upper Tribunal decided in favour of HMRC in August 2011, with a further amended decision issued in November 2011.

Grant Summers, tax partner at Grant Thornton UK, said: “We are pleased that the Upper Tribunal has acknowledged that this issue has wider implications.

“We are led to believe that the potential impact of this decision could be around £200 million. It is important there is clarity about the conditions which must be met for payments of this kind to be exempt from NIC.”

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