Chapter NIM06390
| Published date | 11 April 2016 |
| Record Number | NIM06390 |
| Court | HM Revenue & Customs |
| Issuer | HM Revenue & Customs |
Income Tax (Earnings and Pensions) Act 2003
Legislation provides for the assistance which an employer gives to a disabled employee to aid their travel to and from work to be excluded from Class 1 NICs.
Effectively the legislation excludes from a NICs liability any assistance which an employer gives to an employee for journeys between home and work if that employee is disabled. For these purposes disabled means that the employee has a physical or mental impairment which is likely to have a substantial and long term adverse effect on his orher ability to carry out normal day to day activities. The exclusion applies whether the employer:
- provides the means of travel, or
- meets the cost, or part of the cost, of travel or
- provides a voucher.
The exclusion was originally contained in regulation 19(1)(i) of the Social Security (Contributions) Regulations 1979 and was consolidated into regulation 25 and paragraph 6(e) of Part V and paragraph 8(c) of Part X of Schedule 3 to the Social Security(Contributions) Regulations 2001.
Initially regulation 19(1)(i) provided for the exclusion from Class 1 NICs of any payment which an employer made towards the costs incurred by a disabled person in travelling between home and work. With effect from 6 April 2001 the wording of the legislation was changed to reflect its alignment with Extra Statutory Concession (ESC) A59 which exempted from tax ‘home to work’ travel expenses of employees who are disabled.
Position from 6 April 2004With effect from 6 April 2004 the Social Security (Contributions) Regulations 2001 were amended in recognition of the coming into force of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003).
Although ITEPA 2003 did not change the meaning of existing tax law, the opportunity was taken, as part of the tax law rewrite commitment, to provide legislative support for tax exceptions previously provided under cover of extra statutory concessions.
Legislative cover for those items excepted from income tax by virtue of ESC A59 (Home to work travel of severely disabled employees) can now be found at section 246 ITEPA 2003 (Transport between work and home for disabled employees: general) and section 266(1) ITEPA 2003 (Exemption of non cash vouchers for exempt...
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