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ACCA Applied Skills · Taxation (UK) · National insurance contributions for employed and self-employed persons

Fenwick Ltd provides an employee with a company van for private use for the whole of the year. The van produces CO2 emissions and the employer also pays for fuel for private journeys. What is the total Class 1A NIC payable by Fenwick Ltd on the van benefit and the van fuel benefit?

The Class 1A NIC is £718.35. The van scale charge of £4,020 and the van fuel benefit of £769 total £4,789, and the employer pays 15% on that total.

  1. A£718.35Correct
  2. B£603.00
  3. C£115.35
  4. D£4,789

Explanation

Van benefit £4,020 plus van fuel benefit £769 = £4,789. Class 1A NIC = £4,789 × 15% = £718.35. £603.00 covers only the van scale charge, omitting the fuel. £115.35 covers only the fuel. £4,789 is the benefit, not the NIC.

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