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Can Expenses Paid To Employees Ever Attract NIC?

Mileage and our of pocket expenses having NIC deducted

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Hi all

A client of ours has just taken on a new bookeeper and she has queried how their payroll is being processed.

It appears expenses payments (the one in question is for mileage and reimbursement for a present bought for a client) are having National insurance deducted but not Income Tax, is there ever a time this could be correct?

Many thanks in advance for your time


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12th Mar 2019 13:11

Whoever's running the payroll has no idea what they're doing.

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14th Mar 2019 09:09

Offhand, I can't think of any circumstance where this would be correct. Genuine reimbursements (receipted expenses, mileage at or below AMAPS rates etc.) attract no tax or NI liability. Assuming the mileage isn't above AMAPS, the examples you give would both fit into this category.

Anything which is considered a BIK is taxable on the employee and NIable (Class 1A) on the employer. There's still no employee NI liability.

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