Mileage records crucial to NI repayments, says TMC
Mileage and expense audit company TMC has highlighted that firms’ business mileage records could determine whether they share in potential "windfall" repayments of NI on car allowances going back six years.
Tax advisors and consultants, Deloitte, have shown that a firm with 100 car allowance users could claim back £400,000 or more in employer’s NI over six years, while the drivers could claim back £350,000 in employee NI contributions over the period.
'The issue hinges on the question of whether the car allowance payments were classed as "earnings" or as reimbursement of motoring expenditure,' said Paul Jackson, managing director of TMC.
'The tribunal ruled that they were reimbursement and therefore not subject to employer’s NI, although most firms have paid NI on these allowances. But mileage records are crucial to obtaining potential repayments – both to verify business mileage and determine how much NI can be reclaimed. For a large business, this could amount to hundreds of thousands of pounds over the past six years.
'This case dramatically underlines the value of mileage recording. Not only does it enable fleets to control today’s costs, while pointing the way to achieving greater cost savings in future, it also holds the key to reclaiming past outgoings.'