Laing O'Rourke Services Ltd (LOR) is a multinational construction and engineering company. The company operated a car scheme which allowed employees who were entitled to receive a company car, or a car allowance payment under the scheme instead of a company car, provided that the employee had a car available for use which met specified requirements.
Within LOR’s employment structure, there were eight staff grades, covering fixed location staff, site-based staff, and roving staff. Subject to meeting different requirements, at times all eight grades could potentially qualify for the car scheme.
For each grade there was an assumed level of car which an employee must have had available for use to qualify for the scheme. Payments under the scheme were determined purely by reference to job grade, and there was no minimum business mileage requirement or overall minimum mileage requirement for the employee-owned cars.
The payment amounts also remained the same throughout the years under appeal (2004/5 to 2017/18)
Applying the framework adopted by the Court of Appeal in Cheshire Employer, which involved the payment of travel allowances to employees, the first tier tribunal in this case [TC08161] considered whether:
The payments were earnings under general law;
If yes, whether the disregard in the Social Security (Contributions) Regulations 2001, sch 3 pt VIII, para 7A applied;
If no, whether regulation 22A applied (reg 22A only applies to the extent that the payments are not otherwise earnings).
It was common ground that the cars driven by the participants in the scheme were “qualifying vehicles” for the purposes of the relevant legislation.
Were the payments earnings?
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