Laing O'Rourke Services Ltd v HMRC

In Laing O'Rourke Services Ltd v HMRC [2021] UKFTT 211 (TC) (8 June 2021) the FTT held that payments made to employees under a car allowance scheme instead of provision of a company car were earnings for NICs purposes but they were not ‘relevant motoring expenditure’. As a result the para 7A disregard was not available and NICs were due on the amounts.

The taxpayer (LOR) is a multinational construction and engineering company. It operated a scheme under which eligible employees could receive a cash allowance as an alternative to a company car. The allowance varied between £4 000 and £10 000 p.a. depending on staff grades payable monthly in arrears. Each employee joining the scheme was required to have available to them at all times a reliable vehicle (i.e. their own private vehicle) appropriate for representing the company and conducting its...