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HMRC internal manual

PAYE Manual

PAYE operation: specific employments: doctors - trainee general practitioners: coding adjustments for car allowance

The Employment Income Manual at EIM61020 explains the background to payments made to a family practice employing a trainee. In most cases, the employment is only for a short period.

Establish the facts

Confirm the amount of the car allowance and agree a reasonable estimate of the allowable car expenses based on the estimated business mileage. Accept any reasonable estimate of allowable expenses given by the trainee.

If you think the estimate is excessive, be prepared to negotiate a reasonable estimate based on the information supplied.

Take prompt action to

  • Make an allowance for job expenses in the trainee’s tax code
  • Tell the employer not to operate PAYE on the car allowance.

If the car allowance exceeds the estimate of allowable expenses, no coding allowance is due.