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HMRC internal manual

Employment Income Manual

HM Revenue & Customs
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Employee Car Ownership Schemes: payments to the employee in person in connection with business mileage - tax treatment

Sections 229 - 236 ITEPA 2003

Introductory remarks, common to this section of the guidance

Unlike car benefit (EIM23000) and car fuel benefit (EIM25500), no single body of legislation deals with ECOS. Instead, the relevant law when considering ECOS is drawn from various parts of the employment income and NICs legislation.

This guidance does not attempt to cover all relevant parts of the legislation in detail. Instead, it seeks to draw the essential aspects together in order to identify where tax and/or NICs can be payable under the normal benefits and expenses rules as they apply to ECOS.

The same principles apply to ECOS vehicles as to any privately-owned vehicles used for business travel.

Unlike the remainder of this manual, EIM31500 to EIM31599 cover both tax and NICs.

Payments to the employee in person in connection with business mileage - tax treatment

Mileage allowance payments (MAPs) are:

  • amounts (other than passenger payments, see EIM31400)
  • paid to an employee
  • for expenses related to the use by that employee
  • for business travel (EIM31260)
  • of a car, van, motor cycle or cycle (see EIM31255).

Examples of MAPs are at EIM31210 and of the kind of expenses not covered by MAPs at EIM31215.

Only MAPs can be exempt from tax as ‘approved mileage allowance payments’, or AMAPs. All other kinds of payment are taxable under the normal rules.

MAPs are exempt if, or to the extent that, the total MAPs paid for a tax year is less than the ‘approved amount’, see EIM31230.

If MAPs paid is more than the approved amount, the excess is taxable earnings to be reported on form P11D (see EIM31590).

If MAPs paid is less than the approved amount, Mileage Allowance Relief (MAR) is available to the employee, see EIM31330.

Main guidance on the AMAPs scheme

This page contains only a brief summary of the AMAPs scheme. The main guidance begins at EIM31200.