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The question is:
Bob is an employee of Dibbit Ltd, and is paid an annual salary of £50,000. He makes contributions of £3,000 into the company’s occupational pension scheme each year. In the tax year 2018/19 he drove 12,000 business miles in his own car for which he was paid 50p per mile by Dibbit Ltd.
How much employer’s class 1 NICs is Dibbit Ltd required to pay in respect of Bob’s earnings and reimbursed mileage for the tax year 2018/19?
The Answer
(50,600 – 8,424) @ 13.8% = 5,820
Workings for 50,600:
Salary 50,000
Plus: Excess Mileage (12,000 x (50p-45p)) = 600.My question is why is it 50p – 45p? Because I thought mileage was 10,000 @ 45p and anything above at 25p
Another one of those very strange tax rules – in computing the employment income assessment for the employee we do indeed use the 25p rate above 10,000 miles – this, however is not done in computing the amount to be subject to Class 1 NIC where we simply use the 40p rate for all miles
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