The Upper Tribunal of the Tax and Chancery Chamber has held that motoring expenses are subject to NICs if they are not linked to mileage.

What does this mean?

There is nothing to stop an employer from making lump sum payments to its employees in respect of motoring expenditure. However, payments that are not linked to mileage will attract NICs.

What should employers do?

Employers should urgently review their mileage policies in light of this ruling.