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HMRC internal manual

Employment Income Manual

Employees using own vehicles for work - must the employee be obliged to use their own vehicle?

Section 236(1) ITEPA 2003It might be thought that the “obliged to incur and pay” condition in the travel expenses rules at sections 337 and 338 ITEPA means that MAR is only available when the employee is obliged to undertake the journey in their own vehicle.

This is not the case. If the employee is obliged to make the journey, and it is not prevented from being business travel by being either substantially or wholly ordinary commuting or private travel, the means used to make the journey do not matter (any more than if a person uses first class instead of second, or train instead of coach).

If the employee was obliged to make the journey and uses their own vehicle, the actual miles travelled on that journey count in the calculation of MAR for the tax year. MAR is only restricted by any mileage allowance the employee has actually received.

This means that MAR may be available where, for example:

  • the person could have used transport provided by the employer but chose to use their own vehicle
  • the person refused to use employer-provided transport because they did not feel that the appointed driver was sufficiently competent

Mileage allowance available but not receivedIt might also be thought that MAR must be restricted where the person could have claimed a mileage allowance from their employer but actually received nothing, either because they chose not to claim or because they failed to do so in the time allowed by the employer.

This is also not the case. Mileage allowance payments which are actually received reduce the amount of MAR available pound for pound, but those which might have been received but are not have no effect on the amount of MAR available.

ExamplesA footballer plays for Birmingham City and lives between Coventry and Birmingham. Birmingham are playing at Coventry and the team coach is available. Because the footballer would travel west to reach the team coach, then east to go to Coventry, he makes the journey in his own car. The journey between home and a temporary workplace is a business journey and he has actually driven the miles in his own car, so MAR is available.

An employee whose permanent place of work is in London attends a business meeting in Sheffield with colleagues. Although her colleagues propose to travel in the employer’s pool car, she uses her own car as she wants to return home early that evening. The journey is a business journey and MAR is available as she has actually driven the miles between home and a temporary workplace.