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HMRC internal manual

National Insurance Manual

HM Revenue & Customs
, see all updates

Class 1 NICs: Expenses and allowances: Mileage allowances: Normal components of a mileage allowance

  • fuel
  • oil and other lubricants
  • the additional insurance costs incurred as a result of using a car for business related travel
  • road fund licence
  • servicing, repairs and replacements
  • depreciation.

Although the payment of mileage allowances is one way employers reimburse employees the costs they incur using a privately owned car for business travel, employers may choose to meet the cost by:

  • repayment of the exact costs involved, see NIM05020 
  • regular round sum allowances, see NIM06160 
  • supplying fuel from their own fuel pump, see NIM05662
  • requiring the employee to use a garage with which the employer has an account, see NIM05662
  • providing fuel vouchers, NIM05662
  • supplying the employee with a company credit card or fuel agency card, see NIM05662