SE31380 - Employees using their own vehicles for work: rules for deductions from 2002/03 onwards - mileage allowance relief - calculating amount of relief where employee uses more than one vehicle in the year - example
Paragraph 4 Schedule 12AA ICTA 1988 as introduced by Schedule 12 FA 2001
These examples illustrate the steps for calculating the amount
of mileage allowance relief (MAR) that are set out at
SE31340 and show the way MAR is
calculated where the employee uses more than one vehicle during the
tax year.
See
SE31225 for what counts as "business
travel."
EXAMPLE 1
Employee uses her own car for business travel. She owns two cars and uses both of them for business travel. In the tax year 2002/03 she drives 6,000 business miles in one car and 5,000 business miles in the other. Her employer pays her 36p a mile for all business miles travelled, whichever car she uses.
| Step 1 | The vehicles both fall 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 36p 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 - the 10,000 mile limit applies in
exactly the same way even if more than one car is used during the
tax year)
|
| Step 4 | In this example, Step 2 is less than Step 3. |
Conclusion: the employee is entitled to MAR of £290.
EXAMPLE 2
Employee uses his own car for business travel. He also uses his own cycle for short business journeys to locations close to his office. In the tax year 2002/03 he covers 9,500 miles of business travel in the car and 700 business miles on the cycle . His employer pays him 42p a mile for business travel in the car and 10p a mile for journeys by cycle.
| Step 1 | The car and the cycle are
different kinds of vehicle for AMAPs and MAR (see EIM31230). The
calculations must therefore be kept separate. The applicable
mileage rates are (EIM31240):
|
| Step 2 | The payments of 42p a
mile for the car and 10p a mile for the cycle count as mileage
allowances payments (MAPs) (see EIM31210 and EIM31260). MAPs
received are
|
| Step 3 | The AMAPs amount for each
kind of vehicle is (see EIM31215 - the 10,000 mile limit for cars
or vans is not affected by the business miles travelled on the
cycle, even though the total between the two kinds of vehicle
exceeds 10,000 business miles.)
|
| Step 4 | In this example
|
Conclusions:
- the employee is taxable on £190 in respect of the car and
- entitled to MAR of £70 in respect of the cycle.
Note: do not amalgamate the results further – keep the 2 kinds of vehicle separate
