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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: examples: mileage allowance payments at pence per mile rate

Section 230 ITEPA 2003

This page illustrates the calculation of chargeable mileage allowance payments and mileage allowance relief (EIM31235) where payments are made on a pence per mile basis for business travel (EIM31260) in an employee’s own vehicle.

EXAMPLE 1 for 2002-03 to 2010-11

Employee B uses their own car for business travel. In the tax year 2003/04 B does 5,000 business miles in it and is paid 44p per mile.

Step 1: find the amount of mileage allowance payments (MAPs) received:

MAPs received 5,000 x 44p = £2,200
     

Step 2: deduct the approved (exempt) amount (see EIM31230):

approved amount 5,000 x 40p = £2,000
     

Step 3: is the answer positive or negative?

The answer is positive:

Excess over AMAPs taxable, report on P11D £ 200
     
AMAPs exempt £2,000

EXAMPLE 2 for 2011-12 onwards

Employee C uses their own car for business travel. In the tax year 2011-12 C does 5,000 business miles in it and is paid 49p per mile.

Step 1: find the amount of mileage allowance payments (MAPs) received:

MAPs received 5,000 x 49p = £2,450
     

Step 2: deduct the approved (exempt) amount (seeEIM31230):

Approved amount 5,000 x 45p = £2,250
     

Step 3: is the answer positive or negative?

The answer is positive:

Excess over AMAPs Taxable, report on P11D £ 200
     
AMAPs Exempt £2,250

EXAMPLE 3 for 2002-03 to 2010-11

Employee D uses their own car for business travel. In the tax year 2003/04 D does 12,000 business miles in it and is paid 35p per mile.

Step 1: find the amount of mileage allowance payments (MAPs) received:

MAPs received 12,000 x 35p = £4,200
     

Step 2: deduct the approved (exempt) amount (see EIM31230):

approved amount 10,000 x 40p = £4,000  
       
  2,000 x 25p = £ 500 £4,500

Step 3: is the answer positive or negative?

The answer is negative:

Mileage Allowance Relief available (EIM31330) relief £300
     
AMAPs exempt £4,200

EXAMPLE 4 for 2011-12 onwards

Employee E uses their own car for business travel. In the tax year 2011-12 E does 12,000 business miles in it and is paid 35p per mile.

Step 1: find the amount of mileage allowance payments (MAPs) received:

MAPs received 12,000 x35p £4,200
     

Step 2: deduct the approved (exempt) amount (see EIM31230)

Approved amount 10,000 x 45p = £4,500  
       
  2,000 x 25p = £ 500 £5,000

Step 3: is the answer positive or negative?

The answer is negative

Mileage Allowance Relief available (EIM31330) relief £ 800
     
AMAPs exempt £4,200