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HMRC internal manual

National Insurance Manual

From
HM Revenue & Customs
Updated
, see all updates

Class 1 NICs: expenses and allowances: mileage allowances: introduction

In broad terms, mileage allowances fall into two main categories:

  • payments aimed at covering a range of expenses connected with motoring. These are normally paid to those employees who are required to use a privately owned car for business travel, see NIM05702 
  • payments only for fuel. Employers may pay these to employees who use vehicles the employer provides, see NIM16175; or they may pay them to employees who use a privately owned car for business travel, see

    • NIM05708 for payments made before 6 April 2002; and
    • NIM05800 for payments made after 5 April 2002.

Where, unusually, an employer pays a mileage allowance to an employee wholly for private travel, see:

  • NIM05708 where the car is privately owned for payments made before 6 April 2002
  • NIM05800 where the car is privately owned for payments made after 5 April 2002
  • NIM16175 where the employer provides an employee with a car.

The definitions and rules applied to determine qualifying business travel, including business mileage, are the same for both tax and NICs, see EIM32015.