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HMRC internal manual

Employment Income Manual

Employees using own vehicles for work: examples of things which are not mileage allowance payments

Sections 229(2) and 359 ITEPA 2003

This page supplements EIM31210, which contains examples ofmileage allowance payments (MAPs).

These items are not MAPs and so cannot be exempt from tax under the AMAPs legislation:

  • anything that is not a payment, e.g. benefits provided, say insurance (the full cost should be reported as a benefit to the employee on form P11D)
  • anything that is not paid to the employee, e.g. a payment of the employee’s personal liability, say to the provider of a car loan (this should also be reported on form P11D), or a payment which would have been made to the employee had it not been assigned to someone else (unless out of net pay)
  • a payment not related to business mileage, e.g. for private mileage, or to compensate the employee for the fact that they no longer have a company car (such payments are earnings which should be subjected to PAYE in the normal way)
  • a fixed amount per month that is not calculated on the basis of business mileage, including estimates (these are also normal earnings within PAYE). Part of the payment cannot later be reclassified as being paid for expenses; the nature of the payment is fixed when it is made.
  • payments not in respect of mileage, which are chargeable under section 72(1) unless covered by a dispensation. We do not apply section 359 so as to deny deduction for this kind of expense, so deductions continue to be dealt with under the general expenses rules in Part 5 Chapter 2 ITEPA 2003, see EIM31800 onwards; e.g.
    • payments for expenses like road, bridge and tunnel tolls (these only allow the car to cross a line in the road)
    • congestion charges (they may or may not relate to mileage as they can be incurred while the vehicle is parked)
    • parking (which has nothing to do with mileage at all), or
    • motoring offences such as speeding fines or parking tickets (these cannot be covered by a dispensation).

It is therefore clear that not everything apparently connected with mileage is a MAP.Any apparent inequity is accounted for by the availability of Mileage Allowance Relief(MAR) - see EIM31330 onwards.

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