For 2002/03 onwards employees using their own vehicle or bicycle
for business journeys are not permitted relief under Sections 336
to 340 ITEPA 2003 for the actual cost of those journeys. Instead
they are entitled to a fixed statutory rate of mileage allowance
relief to the extent that any reimbursement they receive falls
short of the statutory rate, see
Section 232 ITEPA 2003 determines the amount of mileage allowance relief that can be deducted from income charged on receipt and on remittance. It does not follow the scheme for other expenses because it provides for a deduction for a notional rather than an actual expense and so it is not possible to determine out of which earnings it was met. Instead there is a simplified scheme.
To determine the amount of the deduction follow these steps:
A deduction can only be given once in respect of the same
mileage allowance relief.
This is illustrated by example EIM31761.