Total People has won an appeal to overturn an Upper Tribunal decision made in favour of HM Revenue and Customs over motor mileage national insurance (NI) claims.
The case relates to a NI claim made by the organisation based on the difference between HMRC’s 40p per mile allowance rate and the 12p per mile paid by the employer plus an additional lump sum paid to the employees for using their private car for business purposes.
The case was first heard in a first-tier tribunal in 2010, which found in favour of Total People, but an Upper Tribunal ruling in 2011 overturned the ruling in favour of HMRC.
At the Court of Appeal, HMRC made a new contention that even if the lump-sum payments were not paid as salary they were earnings and so were subject to tax and NI payments. Total People appealed this stating that the Upper Tribunal made an error in judgment and the first-tier ruling was correct. The Court of Appeal judged that this was the case and that the lump sums were not earnings.