SE31405 - Employees using cars or vans for work: calculation of exempt amount, the approved amount for passenger payments

Section 197AE and Paragraph 5 Schedule 12AA ICTA 1988 as introduced by Section 57 and Schedule 12 FA 2001

Details of the exemption for passenger payments, which applies only from 6 April 2002, are at SE31400.

The approved amount for passenger payments

The approved amount (the exempt amount) is

M x R

where

• M is the number of miles of business travel by the employee, by car or van, for which the employee carries a qualifying passenger in the tax year in question and in respect of which passenger payments are made
• R is 5p per mile.

If more than one passenger is carried, the approved amount is the total of the amounts calculated in respect of each qualifying passenger. The same mile travelled may therefore be counted more than once if more than one passenger is carried simultaneously.