Isak 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 2021/22 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 Isak for the tax year 2021/22?
Answer from Kaplan EK: 5763
Hi tax tutor, can you help explain the above answer as I got 5818 by calculating the excess mileage allowance as 1000 (12000@50p - 10000@45p - 2000@25p). The kit calculates it at 600 (12000x(50p-45p)). It’s Q60 in the Kaplan kit.
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NIC Question
The answer in the kit is correct - the 10,000 mile cut off that applies in computing the taxable benefit for employment income does not apply for NIC purposes.
Thanks, that makes sense now!
Dear Sir
Why 5000 Allowance is not deducted in the above question.?
It's not part of the remit for the question - dont go beyond the question
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