EIM31355 - Employees using own vehicles for work: examples: mileage allowance payments at pence per mile rate
Section 230 ITEPA 2003
This page illustrates the calculation of chargeable mileage allowance payments and mileage allowance relief (EIM31235) where payments are made on a pence per mile basis for business travel (EIM31260) in an employee’s own vehicle.
Example one: for 2011 to 2012 onwards
Employee A uses their own car for business travel. In the tax year 2011 to 2012 A does 5,000 business miles in it and is paid 49 pence per mile.
Step one: find the amount of mileage allowance payments (MAPs) received
MAPs received: 5,000 × 49 pence = £2,450
Step two: deduct the approved (exempt) amount (see EIM31230)
Approved amount: 5,000 × 45 pence = £2,250
Step three: is the answer positive or negative?
The answer is positive:
- excess over AMAPs is taxable and reported on P11D, in this example the amount in excess over AMAPs is £200
- AMAPs exempt amount is £2,250
Example two: for 2011 to 2012 onwards
Employee B uses their own car for business travel. In the tax year 2011 to 2012 B does 12,000 business miles in it and is paid 35 pence per mile.
Step one: find the amount of mileage allowance payments (MAPs) received
MAPs received: 12,000 × 35 pence = £4,200
Step two: deduct the approved (exempt) amount (see EIM31230)
- first 10,000 miles at 45 pence: 10,000 × 45 pence = £4,500
- additional miles at 25 pence: 2,000 × 25 pence = £500
- total exempt amount = £5,000
Step three: is the answer positive or negative?
The answer is negative:
- mileage allowance payments received: £4,200
- approved exempt amount: £5,000
- mileage allowance relief available (EIM31330): £800 (£5,000 - £4,200)