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HMRC internal manual

Employment Income Manual

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Employees using own vehicles for work: examples: vehicles of different kinds used during the tax year

Section 230 ITEPA 2003

This page illustrates how the calculation of chargeable mileage allowance payments and mileage allowance relief (EIM31235) for business travel (EIM31260) in the employee’s own vehicle is modified when vehicles of different kinds is used during the tax year.

EXAMPLE 1: for 2002-03 to 2010-11

Employee M uses their own car for business travel. They also use their own cycle for short business journeys to locations close to the office. These are different kinds of vehicle (EIM31240). M covers 9,500 business miles in the car and 700 business miles on the cycle in the tax year 2003/04, receiving 38p a business mile for car journeys and 22p a mile for cycle journeys.

The calculation at EIM31235 must be carried out separately for each kind of vehicle (EIM31255).

Car:

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

MAPs received 9,500 x 38p £3,610
     

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

approved amount 9,500 x 40p = £3,800
     

Step 3: is the answer positive or negative?

The answer is negative:

Mileage Allowance Relief available (EIM31330) relief £ 190
     
AMAPs exempt £3,800

Cycle:

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

MAPs received 700 x 22p £154
     

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

approved amount 700 x 20p £140
     

Step 3: is the answer positive or negative?

The answer is positive:

Excess over AMAPs taxable, report on P11D £ 14
     
AMAPs Exempt £140

Overall result

Here, the result is a taxable excess on one kind of vehicle and MAR available on the other. Because they are the results of separate calculations, they should be reported separately, not amalgamated.

EXAMPLE 2: for 2011-12 onwards

Employee N uses their own car for business travel. They also use their own cycle for short business journeys to locations close to the office. These are different kinds of vehicle (EIM31240). N covers 9,500 business miles in the car and 700 business miles on the cycle in the tax year 2011-12, receiving 38p a business mile for car journeys and 2p a mile for cycle journeys.

Car:

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

MAPs received 9,500 x 38p £3,610
     

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

Approved amount 9,500 x 45p = £4,275
     

Step 3: is the answer positive or negative?

The answer is negative:

Mileage Allowance Relief available (EIM31330) Relief £ 665
     
AMAPs Exempt £4,275

Cycle:

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

MAPs received 700 x 22p £154
     

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

Approved amount 700 x 20p £140
     

Step 3: is the answer positive or negative?

The answer is positive:

Excess over AMAPs Taxable, report on P11D £ 14
     
AMAPs Exempt £140

Overall result

Here the result is a taxable excess on one kind of vehicle and MAR available on the other. Because they are the results of separate calculations, they should be reported separately, not amalgamated.