SE31340 - Employees using their own vehicles for work: rules for deductions from 2002/03 onwards - mileage allowance relief - how to calculate the amount of mileage allowance relief

Section 197AF and Paragraph 4 Schedule 12AA ICTA 1988 as introduced by Section 57 and Schedule 12 FA 2001

As explained at SE31330, if an employee uses his or her own vehicle for business travel, there are two circumstances in which mileage allowance relief (MAR) is due:

• the employee gets no mileage allowance payments for business travel in that kind of vehicle, or
• the total amount of all the mileage allowance payments for that kind of vehicle is less than the "approved amount for mileage allowance payments applicable to that kind of vehicle" (the AMAPs amount, see SE31215).

The calculation of MAR can be broken down into steps. There is a single calculation for the whole tax year unless

• the employee has more than one employment, and the employments are not associated (see below), or
• the employee uses more than one kind of vehicle (see below).

See example SE31360 onwards.

Note: The 10,000 business mile limit for cars and vans applies in the same way for MAR as for AMAPs.

Employee has more than one car or van

If the employee has more than one car or van (whether consecutively or simultaneously), the business miles for each car or van must be added together to work out if the 10,000 mile limit has been reached. (But this is subject to the separate employments rule described below). See example SE31380.

Employee uses more than one kind of vehicle

If the employee uses more than one vehicle, and the vehicles fall into different kinds for the purposes of the mileage rates shown at SE31240, the calculation is carried out separately for each kind of vehicle. See example SE31380.

Employee uses car or van in more than one employment

Where an employee uses his or her car or van for business travel for two or more employments that are not associated, the business mileage from each employment is counted separately for the purpose of deciding when 10,000 business miles is reached. See example SE31385.

Where an employee uses his or her car or van for business travel for two or more associated employments, the business mileage should be aggregated for the purpose of deciding when 10,000 business miles is reached. See example SE31385.

See SE31220 for meaning of associated employment.