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HMRC internal manual

Employment Income Manual

HM Revenue & Customs
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Employees using own vehicles for work: definition and examples of mileage allowance payments

Section 229(2) ITEPA 2003

Mileage allowance payments (MAPs) are:

  • amounts (other than passenger payments, see EIM31400)
  • paid to an employee
  • for expenses related to the use by that employee
  • for business travel (EIM31260)
  • of a car, van, motor cycle or cycle (see EIM31255).

MAPs can therefore be paid for any such vehicle (including company cars), but thatpayments in respect of business travel in company cars cannot be exempt from tax as AMAPs.

Examples of mileage allowance payments

The following are all mileage allowance payments (MAPs):

  • a mileage rate for business travel only, paid in arrears on an actual basis
  • a payment based on estimated mileage (as long as the estimate is reasonable; if it is not, it is likely that none of the payment is a MAP)
  • a lump sum payment aimed at covering the business proportion only of the standing costs of the car - for example, we accept that the lump sum instalment payments for regular business drivers made at nationally agreed rates by many local authority and NHS employers are for this purpose. It must not, for instance, a payment made merely because the person no longer has a company car. While the lump sum will inevitably be based on estimates, those estimates must be reasonable when made and reviewed during the year to ensure that they remain reasonable
  • a combination of any of these (for instance a monthly lump sum, a lower rate per mile and a separate rate per mile for fuel costs, see example EIM31360)

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Things which are not mileage allowance payments

For examples and details of how these items are treated, see EIM31215.