Employees using their own vehicles for work are entitled to receive certain payments free of tax and National Insurance contributions (NICs) - the rules for each are related but not identical.
If employees receive greater amounts than are allowed tax-free, they will pay tax on the excess. If they receive greater amounts than are allowed NICs-free, both employers and employees will be liable for Class 1 NICs on the excess.
If employees receive less than the respective amounts above, no NICs will be payable and tax relief will be available.
