SE23322 - Car benefits: calculating the car benefit charge 1999/2000 to 2001/02; adjustment of PAYE codes for high business mileage

You can adjust the PAYE code for high business mileage if

• the employee asks for this to be done, and
• it is clear that the employee is likely to cover at least 2,500 or 18,000 business miles in the tax year in the provided car.

Tell the taxpayer that at the end of the tax year - and of all subsequent years for which similar arrangements are made - he or she will be required to justify this claim. If unable to do so, the full car benefit charge will be included in a Schedule E assessment made upon the taxpayer.

Wherever possible advise such employees to keep sufficiently detailed records to show the extent of their business travel in the car during the tax year. Individuals falling within the '18,000 business miles and over' bracket are likely to be people like commercial travellers and sales representatives covering large areas.