SE31375 - Employees using their own vehicles for work: rules for deductions from 2002/03 onwards - mileage allowance relief - calculating amount of relief where employer makes mileage allowance payments - over 10,000 business miles - example
Section 197AF(1)(b) and (3)(b) 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 16,000 business miles in it. Her employer pays her 30p for each mile of business travel.
| 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 after that (see EIM31240). |
| Step 2 | The payments of 35p a
mile count as mileage allowances payments (MAPs) (see EIM31210 and
EIM31260). MAPs received are
|
| 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: the employee is entitled to MAR of £700.
EXAMPLE 2
Employee uses his own motor cycle for business travel. In the tax year 2002/03 he covers 10,500 business miles on it. His employer pays him 25p for each mile of business travel.
| Step 1 | The vehicle falls into the motor cycle kind. So the applicable mileage rate is 24p for each business mile (see EIM31240). |
| Step 2 | The payments of 25p a
mile count as mileage allowances payments (MAPs) (see EIM31210 and
EIM31260). MAPs received are
|
| Step 3 | The AMAPs amount for a
motor cycle is: (see EIM31215)
|
| Step 4 | In this example, Step 2 is greater than Step 3. |
Conclusion: the employee is not entitled to any MAR, but is taxable on £105 (See EIM31250 onwards).
