In the case of Cheshire Employer and Skills Development Ltd (formerly Total People Ltd) v HMRC [2012] EWCA Civ 1429, the taxpayer has won a long-running dispute with HMRC regarding reclaim of NICs for the last six years on car allowance payments. The Court of Appeal dismissed the Upper Tribunal decision and re-affirmed the conclusion in the First-tier Tribunal that ‘round sum allowances’ designed to do no more than compensate employees for business travel are not earnings and therefore should not have been taxed as earnings. Affected taxpayers should consider making a protective claim for NIC refunds.
