SE31906 - Travel expenses: general - employees using own car for work - calculation of allowable expenses - statutory basis - treatment of car lease or rental payments - example

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

An employee hires a car which is used in journeys which count as business travel for tax purposes. The rental is £3,000 and the retail price of the car when new is £16,000.

You arrive at the rental to allow as follows