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HMRC internal manual

Employment Income Manual

Tax treatment of local authority officials and employees: payments for using own car for work: centrally negotiated National Joint Council rates

There are no special tax arrangements for payments to employees of local authorities for using their own car for work. All mileage allowance payments are dealt with under the statutory approved mileage allowance payments (AMAPs) scheme. Full guidance is at EIM31200 onwards.

Background information

Make sure you are familiar with the material at EIM65815 before reading this page.

The centrally negotiated National Joint Council rates provide for payments for business travel to be made to:

  • casual users at a given rate per mile
  • essential users by means of a lump sum plus a given rate per mile.

(Note that local authorities that have chosen to pay mileage allowances under their own schemes are also likely to recognise casual and essential users. You need to compare the actual rates paid for particular car engine sizes in order to work out whether or not the centrally agreed rates are being used).

Under the centrally agreed schemes the given rate per mile varies according to car engine size. The following information relates to the present scheme, which has been in operation since 1 October 1993.

Unless the local authority is paying under the restricted payments scheme (see below) or is in Scotland (see below) engine sizes are divided into the following classes:

Class Engine size (cc)
1 Up to 999
2 1,000 to 1,199
3 1,200 and over

Under the restricted payments scheme two classes of engine size are used:

Class Engine size (cc)
1 Up to 999
2 1,000 to 1,199

In Scotland, local authority employers who pay at centrally approved rates use different categories of engine size. In the past they used two categories of engine size, but not the same ones as in the restricted payments scheme. But they are now paying a single level of mileage rate, irrespective of engine size. Centre 1 Employers’ Office obtains details of the centrally agreed mileage allowances of local authority employers in Scotland.