Non domiciled employees who work in the UK may use their own
vehicles for business travel. Approved mileage allowance payments
(AMAPs) paid to employees in respect of business travel in their
own vehicles are exempt from tax. The
actual cost of such travel is not deductible
(Section 359 ITEPA 2003). However, employees may be entitled to a
deduction for mileage allowance relief (MAR) for travel that would
have qualified for tax relief as business travel (see
EIM31800 onwards). This may be the case
whether or not they receive AMAPs. See
EIM31205 for an overview of the system.
The AMAPs and MAR legislation links the meaning of business
travel directly to the rules for deductions under Sections 337 to
342 ITEPA. This link should be taken to mean that business travel
also includes journeys that qualify for tax relief under the
special rules for non domiciled employees working in the United
Kingdom. The effect of this is that where MAR is available in
respect of the use of a vehicle -
It follows that AMAPs will be exempt and MAR may be due for
employees who use their own vehicles for travelling between the
country where they normally live and the UK provided that all the
other conditions for relief under Section 373 have been satisfied
(see
EIM35010).
Section 374 provides relief for the travelling expenses of an
employee's family where certain conditions are satisfied (see
EIM35050). The legislation providing for
the exemption for AMAPs and for MAR requires an employee to use a
qualifying vehicle for business travel. Therefore, the exemption
for AMAPs and MAR may be available when the family accompanies the
employee but not when the family travels alone. The additional
exemption for passenger payments is unlikely to be available for
family members who accompany the employee. This is because
qualifying passengers have also to be employees for whom the travel
is business travel.
