Employers need clarity over NIC mileage payments

Accountants may be interested in the news that Grant Thornton has been granted permission to take their case surrounding Total People Ltd to the Court of Appeal.

The case surrounds a refund claim for National Insurance Contributions on mileage as well as reimbursement of expenses to employees who use their private vehicles for business purposes.

Total People appealed to a First-tier Tribunal back in August 2010, at which time the appeal was successful. However, HMRC lodged a successful appeal against that decision in the Upper Tribunal in August last year.

Grant Summers, one of the tax partners at Grant Thornton UK LLP, said he was glad that the Upper Tribunal acknowledges the wider implications of this case. The potential impact could be as much as £200 million and it is vital that employers can clearly understand the conditions they need to meet to claim exemption from NICs on expenses payments.

Meanwhile, the NAO is going to report on whether the pensions regulator is addressing the key risks to members of defined contribution pension scheme. A lot of private sector organisations used to offer final salary pension schemes, but in recent years they have been closing them to new recruits and offering a defined contribution scheme instead.

The latest multi-national to take this action is Shell, the Anglo-Dutch oil giant, who says that as from 2013, new entrants to the company will be offered a defined contribution pension scheme. According to Shell, this move reflects UK market trends.

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