Mileage Allowances

It is quite normal practice for employees to be reimbursed at a reasonable mileage rate for business use of their own vehicles. The income tax and national insurance contributions (NICs) position is as follows:

A statutory system of Approved Mileage Allowance Payments (AMAPs) applies for employees using their own vehicles for business journeys, as follows:

Cars and vans:  
on the first 10,000 miles in the tax year 45p per mile
on each additional mile above this 25p per mile
   
Motorcycles 24p per mile
   
Bicycles  20p per mile

It is no longer possible to make a claim for tax relief based on the actual receipted bills, nor claim capital allowances or interest on loans related to car purchases.

Unless the employee is reimbursed at a rate higher than the AMAP, the payments do not need to be reported on a P11D. If the employer pays less than these rates, it is possible for the employee to claim income tax relief for the shortfall.

Rates of up to 5p per mile, per passenger, are also tax- and NICs- free when paid for the carriage of fellow employees on the same business trip. This now covers volunteers who drive for hospital car services etc, even though they are not strictly employees.

The 1929 Building
Merton Abbey Mills
18 Watermill Way
London
SW19 2RD


Tel: 020 8542 4262
Fax: 020 8545 0662


Email us click here

Register | Logon | Site Map | Disclaimer | Cookie Policy

Thomas Harris Chartered Accountants. All rights reserved.