An opportunity exists for employers to reclaim Class 1A National Insurance on many benefits in kind provided to directors or employees where there is mixed business and private use. Refunds can be claimed for the years 2003/4-2005/6. However, as the time limit for claiming refunds for 2003/4 is 5 April 2011, quick action is needed. Claims for 2004/5 and 2005/6 must be made by 5 April 2012 and 2013 respectively.
This opportunity is as a result of a tribunal case (Antique Buildings Limited) in which the taxpayer was allowed to calculate Class 1A NI on the provision of a helicopter with both private and business use so that Class 1A NI only applied to the private use element. HMRC has decided not to contest the tribunal’s decision.
More common examples of benefits with mixed use may be any employer-owned assets made available to employees, or bills for services that employees use where the contract is in the name of the employer. Specific changes have now been made to the legislation and so Class 1A will be due on the full value of the benefit from 6 April 2006 regardless of the level of business use.