SE31840 - Travel expenses: general - employees using own car for work - general
Important note:
From 2002/03 the rules described below have changed. There is
a new statutory mileage allowance relief rate that is used to
calculate tax relief that employees can get for using their own
vehicles for work. Employees are no longer entitled to deduct
actual costs (the exact method) or to use the non-statutory
authorised mileage rates (the simple method). There is detailed
guidance on the new scheme at
SE31330 onwards.
2001/02 and earlier
From 1996-97 employees have been able to choose between two methods of calculating the amount of motor expenses incurred in journeys which qualify as business travel.
- The exact method. This is the statutory method and is based on the business proportion of actual motoring costs of the year – see SE31845 onwards
- The simpler method: This is a non-statutory method and is based on approved estimates of motoring costs published by the Inland Revenue under the name 'Inland Revenue`s authorised mileage rates' (previously 'FPCS rates.') – see SE31860 onwards.
The simpler method was introduced from April 1996 and is not
available for years before 1996/97.
Costings of running a car provided by the AA take account of
a number of inadmissible items and should not be admitted as the
basis of an expenses claim.
Guidance on the tax treatment of mileage allowances paid by
employers is at
SE10150.
Guidance on capital allowances on the cost of a vehicle
provided for use in the performance of the duties is at
SE36500 onwards.
For guidance on the types of journeys which qualify as
business travel see the tables of contents at
