Mileage expenses
Employees using their own vehicles for work are entitled to receive certain payments free of tax and 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.
Information for employees
Information for employers
- Internet guidance on mileage expenses
- Booklet 480, expenses and benefits, a tax guide (see chapter 16)
- Booklet 490, employee travel, a tax and NICs guide for employers
Information for others
Reviews and further discussions
- Further discussions on Approved Mileage Allowance Payments (PDF 86K)
- Further discussions announced at PBR 2006 (PDF 51K)
- Review of employee car ownership schemes (ECOS) announced at Budget 2006 (PDF 42K)
