There is detailed guidance on the scheme beginning at EIM31200, with guidance on the treatment of mileage allowance payments at EIM31250.

To apply the scheme you need to compare two amounts:

• the amount paid to the employee (however it is calculated) in respect of business travel and
• the maximum amount they can be paid tax-free using statutory rates. The rates are listed at EIM31240.

The comparison is made over the entire tax year.

If the amount of mileage allowance payments paid in the year is less than the maximum that is exempt for tax (the formula to use is shown at EIM31215), no tax is payable and nothing needs to be declared to the Inland Revenue on form P11D. The employee may be entitled to mileage allowance relief.

If the amount paid in the year is greater than the maximum, the excess must be shown on form P11D.

Follow this link for guidance on the NICs motoring expenses scheme.

Level 3 Table of Contents