Private fuel to escape some NI
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El lauliers who use fuel cards for private vehicle use are to be exempt some National Insurance Contributions.
The move is expected to save employers oiilli ins of pounds.
After years of dispute the Department of Social Security has conceded for the tax years 1989-90 and 1990-91 it will not act to collect Class 1 contributions for the amounts for private mileage put on fuel charge cards by employees.
The decision is estimated to save companies nearly £100 million and will wine as a relief to those companies that had been holding the money while the 'mile was under discussion.
The subject came to a head after fleet management and financial sia-vices company PHH contested the I)SS's standpoint.
Actorcling to PHH, the DSS changpd its mind in 1990 saying Class 1 payments were required.
Discussions between IS and Pill! lawyers resulted in the DS backing down saying it would not take enforcement action over the payments.
However, employers are now liable for the N1C on fuel for private use. In the March 11 Budget the Chancellor said that from April that YUIT ernplOYeSS would have to pay contributions on the cost of fuel provided by employers irrespective of how it was purchased.