Can someone help with a quick question. One of my clients pays their employees a salary plus a petrol allowance each month. Both go through payroll and are taxed and NI'd appropriately. My question is, because it is a petrol allowance, does it still qualify for Employers NI? Any advice, much appreciated :)
Does the employee submit business mileage logs? Is it their own personal car they are using not a company car.
If so and the allowance is on or under the current AMAP rate of 45p per mile, then it is not subject to tax or NI.
The difficulty arises if the employee is paid a set monthly amount without keeping a log or if they submit petrol receipts without there being proof that all that petrol was used for business mileage (remember the journey to and from the normal place of work doesn't count). These additional payments in kind are subject to tax and NI.
-- Edited by pictures on Thursday 23rd of February 2017 12:02:51 PM
-- Edited by pictures on Thursday 23rd of February 2017 12:03:11 PM
Thanks all. No the amount is just an allowance. No mileage logs are submitted. I have checked the records again and calculated that full tax, NI and ENI is being deducted so forming part of his annual salary.
