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HMRC internal manual

Employment Income Manual

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HM Revenue & Customs
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Employees using own vehicles for work: the approved amount for mileage allowance payments

Section 230 ITEPA 2003

As explained in the overview at EIM31205, from 6 April 2002 there is an exemption from tax for approved mileage allowance payments (AMAPs).

Only mileage allowance payments (MAPs) can be exempt from tax under the AMAPs legislation.Two conditions must therefore be fulfilled before a payment is exempt under the AMAPs scheme:

  • first: is the payment a mileage allowance payment (MAP), see EIM31210
  • second: is the payment within the approved amount for mileage allowance payments applicable to that kind of vehicle (this page).

The approved amount for mileage allowance payments (the approved amount)

The approved amount applicable to a kind of vehicle is:

M x R
     

where:

  • M is the number of miles of business travel (EIM31260) by the employee (other than as a passenger), using that kind of vehicle in the tax year in question (note that mileage in company vehicles (EIM31255) is excluded)
  • R is the rate applicable to that kind of vehicle (for rates and kinds, see EIM31240).

Note that the period covered is the tax year itself, so the figure used in the calculation is the actual business mileage in the tax year, not (for instance) the mileage on claim forms submitted in the tax year. The AMAPs amount calculated from the actual business mileage in the year is then compared to MAPs made for that mileage (i.e. for the year), whether they are made in the same tax year or shortly afterwards for administrative reasons.

See EIM31235 for the use which is made of the approved amount in calculating the amount chargeable to tax and any mileage allowance relief which may be available.