HM Revenue & Customs (HMRC) will not launch an appeal after a court ruled it wrongly refused tax relief from national insurance payments paid on car allowances.
HMRC had until 4 September to appeal July’s ruling by the Upper Tribunal.
The two employers – Wilmott Dixon and Laing O’Rourke – successfully argued that car allowance payments made to its employees were ‘relevant motoring expenditure’ and therefore should qualify for relief from Class 1 National Insurance Contributions (NICs).
Both cases were heard together. Laing O’Rourke was appealing an earlier decision which had ruled in favour of HMRC, while the tax authority was appealing a previous ruling in favour of Wilmott Dixon being able to claim the relief.
After considering the evidence, two judges in the UK’s Upper Tribunal ruled in favour of the employers, leaving HMRC potentially having to repay Laing O’Rourke £2.2 million in NICs from tax years 2004/05 to 2017/18 and paving the way for many more claims.
