NIM16010 | Class 1A National Insurance contributions: Special Class 1A NICs cases: Cars provided for private use: Cash alternatives

Section 119 of ITEPA 2003 ensures that a section 120 ITEPA 2003 car benefit charge operates, in cases where an employer offers a cash alternative to a company car but the offer is not taken up. The effect of the legislation also served to confirm that where a cash alternative was offered, but not taken, Class 1A NICs were due.

NICs due on cars provided under a cash alternative scheme depend upon what the employee actually receives.

If the employer provides:

• a car, Class 1A NICs are due

• cash instead, Class 1 NICs are due.