SE31360 - Employees using their own vehicles for work: rules for deductions from 2002/03 onwards - mileage allowance relief - calculating amount of relief where employer makes no mileage allowance payments - under 10,000 business miles - example
Section 197AF(1)(a) and (3)(a) and Paragraph 4 Schedule 12AA ICTA 1988 as introduced by Section 57 and Schedule 12 FA 2001
These examples illustrate the steps for calculating the amount
of mileage allowance relief (MAR) that are set out at
SE31340.
See
SE31225 for what counts as "business
travel."
EXAMPLE 1
Employee uses her own car for business travel. In the tax year 2002/03 she covers 8,000 business miles in it. Her employer pays her a higher salary in recognition of using her own car for work (which is subjected to PAYE and NICs), but does not make any payments at all that are specifically in connection with her expenses of business travel. So she receives no payments that count as mileage allowance payments (MAPs) (see SE31210 and SE31260).
| Step 1 | The vehicle falls into the car and van kind. So the applicable mileage rates are 40p for the first 10,000 business miles and 25p for each additional business mile (EIM31240). |
| Step 2 | MAPs received are nil. |
| Step 3 | The AMAPs amount for a
car or van is (see EIM31215):
|
| Step 4 | In this example, Step 2 is less than Step 3. |
Conclusion: employee is entitled to MAR of £3,200.
EXAMPLE 2
Employee uses his own cycle for business travel. In the tax year 2002/03 he covers 1,000 business miles on it. He receives no payments from his employer for using his cycle.
| Step 1 | The vehicle falls into the cycle kind. So the applicable mileage rate is 20p for each business mile (see EIM31240). |
| Step 2 | MAPs received are nil. |
| Step 3 | The AMAPs amount for a
cycle is (see EIM31215):
|
| Step 4 | In this example, Step 2 is less than Step 3. |
Conclusion: employee is entitled to MAR of £200.
