SE31385 - Employees using their own vehicles for work: rules for deductions from 2002/03 onwards – mileage allowance relief – calculating amount of relief where employee has more than one employer 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 has more than one employment during the tax year.

See SE31225 for what counts as “business travel.”

EXAMPLE 1

The employee changes from employment with employer A to employment with employer B at the end of September 2002. He uses his own van for business travel in both employments. He drives 8,000 business miles for employer A and 4,000 business miles for employer B.

The two employments are not associated (see SE31220). So even though the employee has driven more than 10,000 business miles in total in 2002/03, he does not reach the 10,000 limit in either employment. Therefore the 40p a mile rate (see SE31240) will be used for working out the “approved amount for mileage allowance payments” (the AMAPs amount, see SE31215) used to calculate the amount of MAR for each employment.

Example 2

The employee is a director of two companies in the same group of companies, company Y and company Z. She uses her own car for business travel when carrying out duties for each employment. She drives 8,000 business miles for company Y and 4,000 business miles for company Z.

As her two employers are members of the same group of companies, these two employments are associated (see SE31220). This means that the business mileage for both employments is added together when working out whether the 10,000 higher mileage rate limit for cars and vans has been reached (see SE31240). So in this case, the “approved amount for mileage allowance payments” (the AMAPs amount, see SE31215) used to calculate the amount of MAR shared between the two employments is :