Where payments are made to meet or reimburse travelling expenses incurred by an employee two factors are important in deciding the treatment of those payments for tax and NICs.

Is it business travel?

Only payments to meet the cost of business travel attract tax relief and fall outside liability for NICs.

Does the payment exceed the maximum allowed?

Where business travel is in an employee's own vehicle there is a statutory maximum amount for mileage payments that can be paid free of tax and NICs.

For other modes of transport follow the link to the cost of travel. Payments that do not exceed the actual cost of travel, including necessary incidental costs such as subsistence, can be included in a dispensation and so can be paid free of tax and fall outside liability for NICs.

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