The rules about what constitute business mileage are the same
for both tax and NICs. Guidance on what is qualifying business
travel is contained at
Employers must not include business mileage they anticipate their employees will travel in any calculation of the qualifying amount (QA). Only business mileage the employee has actually travelled may be included.
The QA is the product of the formula “M x R”. For more information about the meaning of “R” see NIM05833.
“M” is the sum of
So, there are two stages to calculating “M”, i.e. the number of business miles travelled.
To determine the number of business miles to use when calculating the QA, the employer may include the number of business miles undertaken at, or before, the time he makes the payment of RME, providing
When the employer makes a payment of motoring expenses, he may include the number of business miles undertaken, for which he has not made, nor will he make, any payment providing
Stage 2 refers to business miles the employee has travelled but
for which the employer will not pay motoring expenses. There may be
a number of circumstances where this might happen. For example,
some employers may reduce the number of business miles for which
they pay motoring expenses by the normal home to workplace mileage
travelled by the employee.
The fact that employers do not pay motoring expenses for some business travel does not prevent the employer including those ‘non-reimbursed’ miles in the calculation for the QA. However, an employer can only include ‘non-reimbursed’ miles in the calculation that the employee has travelled since the last payment of RME.
Therefore, it is necessary that, to take advantage of these miles when calculating the QA, the employer must account for all available ‘non-reimbursed’ miles travelled by the employee each time they pay motoring expenses. If he fails to do so the employer
For more information about the meaning of the QA see NIM05830.