SE31255 - Employees using their own vehicles for work: rules from 2002/03 onwards - approved mileage allowance payments - how to calculate the exempt amount

Section 197AD(3) and Paragraph 4 Schedule 12AA ICTA 1988 as introduced by Section 57 and Schedule 12 FA 2001

As explained at SE31250, there are two stages to identifying whether a payment is an approved mileage allowance payment (AMAP) and exempt from tax.

• First: is the payment one that can be taken into account in working out the amount that is exempt from tax, i.e. is it a "mileage allowance payment" (MAP) (see SE31260 and SE31210).
• Second: is the payment within the AMAPs amount, calculated as detailed at SE31215, see this page.

If the MAPs in the year are less than or equal to the "approved amount for mileage allowance payments applicable to that kind of vehicle" (the AMAPs amount), then the whole of the MAPs are exempt from tax as AMAPs.

If the MAPs in the year exceed the AMAPs amount, the MAPs are split between two categories

• the AMAPs amount, which is exempt from tax, and
• the excess, which is chargeable to tax under the normal rules.

See example SE31290 and subsequent examples for details of how the calculation is carried out.

Note that the period covered is the tax year itself, so the figure used in the calculation is the actual business mileage in the tax year, not (for instance) the mileage on claim forms submitted in the tax year. The AMAPs amount calculated from the actual business mileage in the year is then compared to MAPs made for that mileage (i.e. for the year), whether they are made in the same tax year or shortly afterwards for administrative reasons.

See SE31240 for details of the statutory mileage rates used in the calculation.

See SE31270 if the employee uses more than one car or van.

Employee uses car or van in more than one employment

Where an employee gets motor expenses payments from two or more employments that are not associated, the employee is entitled to payment at the higher rate for cars and vans for the first 10,000 miles travelled in each employment. See example SE31310.

Where an employee gets mileage allowance payments from two or more associated employments, the reimbursed mileage is aggregated for the purpose of deciding when 10,000 business miles is reached. See example SE31315.

See SE31220 for meaning of associated employment.