SE31860 - Travel expenses: general - employees using own car for work - an alternative to the statutory basis - using the Inland Revenue's authorised mileage rates to calculate relief
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 onwards employees have been able to use an
alternative to the strict statutory method (see
SE31845 onwards) when calculating the
amount of their allowable business motoring expenses.
They can use the Inland Revenue authorised mileage rates
appropriate to their particular car to calculate the profit arising
from motor mileage allowances received, or as the basis for a net
deduction.
This applies irrespective of the method which the employer is
using to report motor mileage allowances to the Inland Revenue (see
SE30200 onwards). So the employee can use
the Inland Revenue authorised mileage rates to calculate the profit
or net deduction position on his or her mileage allowances if
- the employer reports gross mileage allowances on form P11D, or
- the employer has a dispensation, or
- the employer uses the Fixed Profit Car Scheme to report profits.
If the employer uses the Car Allowances Enhanced Reporting
Scheme to report profits or net deductions (as appropriate), there
should be no point in the employee making his or her own claim
using the Inland Revenue authorised mileage rates. This is because
an employer who uses the Car Allowances Enhanced Reporting Scheme
should be calculating the same profit or net deduction figure as
the employee would by using the Inland Revenue authorised mileage
rates.
Employees always have the right to submit a statutory Section
198 and capital allowances computation if they prefer.
Details of the amounts of the Inland Revenue`s authorised
mileage rates can be found as follows:
1996/97 –
SE31895
1997/98 to 2000/01 inclusive –
SE31900.
2001/02 –
SE31901
