SE31210 - Employees using their own vehicles for work: rules from 2002/03 onwards - definitions - mileage allowance payments
Section 197AD(2) ICTA 1988 as introduced by Section 57 and Schedule 12 FA 2001
As explained in the overview at
SE31205, from 6 April 2002 there is an
exemption from tax for approved mileage allowance payments (AMAPs).
There are two stages in deciding whether a payment is exempt
under the AMAPs legislation.
- First: is the payment a "mileage allowance payment" (MAP) - see this page.
- Second: is the payment within the "approved amount for mileage allowance payments applicable to that kind of vehicle" (the AMAPs amount, see SE31215 and SE31255).
See SE31230 for the different kinds of vehicle.
Mileage allowance payments (MAPs)
MAPs are amounts paid to an employee in respect of expenses in connection with use by that employee for business travel of his or her own qualifying vehicle. There are various elements of this definition. To be a MAP the item in question must be
- an amount paid to an employee - so something that is not a payment, or that is not paid to the employee, cannot count as a MAP - and therefore does not qualify for exemption from tax under the AMAPs legislation.
- paid in respect of expenses in connection with the employee's use of the vehicle for business travel - so if the payment is in connection with something else, such as the employee's use of the vehicle for other purposes, or to compensate the employee for the fact that she or he no longer has a company car, it cannot count as a MAP - and therefore does not qualify for exemption from tax under the AMAPs legislation. The type of payment that will most commonly satisfy this test is a mileage rate for business travel. But the exemption is not restricted to such payments. Some lump sum or one-off payments may also satisfy this test if they are specifically for business travel in the employee's own vehicle. (See example SE31300).
- For example, we accept that the lump sum instalment payments for regular business drivers made at nationally agreed rates by many local authority and NHS employers are aimed at covering the business proportion of the standing costs of the car.
- But a less targeted payment that is for general use of the car and that is not calculated with specific reference to business use will not count, and should be subjected to PAYE in the normal way. A lump sum or series of monthly payments made to an employee who opts for cash instead of a company car is a typical example of a general payment that should be subjected to PAYE. Where an employer pays a fixed sum per month which is not calculated on the basis of expected business mileage, they cannot reclassify part of the sum as being "paid in respect of expenses".
- paid in respect of the employee's use of a qualifying vehicle. (See SE31230 for what counts as a qualifying vehicle)
- paid in respect of mileage - so expenses like road, bridge and tunnel tolls or congestion charges (which only allow the car to cross a line in the road) and parking (which has nothing to do with mileage at all) are not MAPs. They continue to be dealt with under the general Section 198 expenses rules, see SE31800 onwards. If you are uncertain as to whether a payment is a MAP, contact Personal Tax (Technical), Solihull.
Note: only MAPs can be exempt from tax under the
AMAPs legislation.
Note that MAPs can be paid in respect of vehicles which are
not within the AMAPs scheme (such as company cars), but that such
payments cannot be exempt from tax as AMAPs.
If you are uncertain as to whether a payment is a MAP,
contact
Employment Income Technical.
