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HMRC internal manual

Employment Income Manual

Travelling expenses: employees working abroad: use of employees' own vehicles: mileage allowances and mileage allowance relief

Part 4 Chapter 2 ITEPA 2003Employees who work abroad may use their own vehicles for business travel. Approved mileage allowance payments (AMAPs) paid to employees in respect of business travel in their own vehicles are exempt from tax. The

actual cost of such travel is not deductible (Section 359 ITEPA 2003). However, employees may be entitled to a deduction for mileage allowance relief (MAR) for travel that would have qualified for tax relief as business travel (see EIM31800 onwards). This may be the case whether or not they receive AMAPs. See EIM31205 for an overview of the system.

The AMAPs and MAR legislation links the meaning of business travel directly to the rules for deductions under Sections 337 to 342 ITEPA 2003. This link should be taken to mean that business travel also includes journeys that qualify for tax relief under the special rules for employees travelling to work outside the United Kingdom. The effect of this is that where MAR is available in respect of the use of a vehicle:
* no deduction may be made under either Sections 341 to 342 ITEPA 2003 or Sections 370 to 371 ITEPA 2003 but * the travel will be eligible for MAR if, in the absence of MAR, a deduction would have been available for it.AMAPs will be exempt and a deduction for MAR may be available for employees who use their own vehicles for travelling to and from the UK and who satisfy the conditions for relief under:

  • Section 341, see EIM34020
  • Section 342, see EIM34080
  • Section 370, see EIM34025 and EIM34040.Section 371 provides relief for the travelling expenses of an employee’s family where certain conditions are satisfied (see

EIM34050). The legislation providing for the exemption for AMAPs and the deduction for MAR requires an employee to use a qualifying vehicle for business travel. Therefore, the exemption for AMAPs and the deduction for MAR may be available when family members accompany the employee but not when the family travels without the employee. The exemption for passenger payments is unlikely to be available for family members who accompany the employee. This is because qualifying passengers have also to be employees for whom the travel is business travel.