Total People to appeal car expenses ruling
A training provider will appeal against an upper tier tribunal ruling about travel expenses and tax relief. Nick Huber reports.
The upper tribunal ruling in Total People v HMRC (FTC/89/2010, July 2011) said that that lump sums given to employees who use their own cars for work must be linked to distance travelled in order to claim relief on national insurance contributions (NICs).
The dispute between Total People - now called Cheshire Employer and Skills Development (CEDL) - and HMRC is about whether the NIC relief for business travel could be used not only on a mileage rate but also on a lump-sum car allowance for employees.
Last year the lower tribunal ruled in favour of Total People, saying that the car allowance was a relevant motoring expense and therefore the NIC relief could be claimed.
But after an appeal by HMRC the upper tribunal has ruled that the payments did not qualify as relevant motoring expenditure and should therefore be treated as part of a remuneration package for tax purposes.