NIM05750 | Class 1 NICs: Expenses and Allowances: Mileage allowances: Rules before 6 April 2002: Civic dignitaries

This guidance needs to be read in the context of the applicable NICS treatment pre 06 April 2002

Civic dignitaries are elected office holders and for NI purposes are classed as Local Authority (LA) employees, see NIM05640. Liability for Class 1 NICs arises if a civic dignitary receives a payment of earnings.

Mileage allowances paid to civic dignitaries are treated for NICs in the same manner as any other mileage allowances paid by other employers. Class 1 NICs are due on:

• reimbursed private mileage

• any amount which cannot be identified as a business expense or is regarded as a profit element within a business expense.

The rules and methods for determining whether any Class 1 NICs liability arises on mileage allowance payments made by LA employers to civic dignitaries are the same as for any other employer. See NIM05708 for mileage allowances and NIM05720 for lump sum payments.

Certain civic dignitaries can be classed as ‘essential car users’ and receive a:

• mileage allowance and

• a lump sum payment.

Lump sum payments paid to civic dignitaries are treated for NICs in the same manner as any other lump sum payment paid by LAs, see NIM05740.