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

Kemal is employed by Orchid Ltd. In 2025/26 he is provided with a petrol company car with CO2 emissions of 55 grams per kilometre. The car has a list price of £30,000 and was available for the whole year. No fuel was provided and Kemal made no capital contribution. What is the Class 1A NIC payable by Orchid Ltd on the car benefit?

The Class 1A NIC is £765. The car benefit is 17% of £30,000, which is £5,100, and the employer's Class 1A charge is 15% of that amount.

  1. A£765Correct
  2. B£900
  3. C£4,500
  4. D£5,100

Explanation

The car benefit percentage for a petrol car at 55 g/km is 17%. Benefit = £30,000 × 17% = £5,100. Class 1A NIC = £5,100 × 15% = £765. £900 uses 20% of £30,000... not applicable; £4,500 is 15% of the list price, with no percentage applied.

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