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NIC Question

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA TX-UK Exams › NIC Question

  • This topic has 2 replies, 2 voices, and was last updated 1 year ago by TMaC123.
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    Posts
  • September 5, 2022 at 3:46 pm #665239
    TMaC123
    Participant
    • Topics: 19
    • Replies: 22
    • ☆

    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.

    September 6, 2022 at 1:54 am #665318
    Tax Tutor
    Member
    • Topics: 2
    • Replies: 3965
    • ☆☆☆☆☆

    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.

    September 7, 2022 at 2:56 pm #665609
    TMaC123
    Participant
    • Topics: 19
    • Replies: 22
    • ☆

    Thanks, that makes sense now!

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