½Û×ÓÊÓƵ

No liability to tax under employment income provisions arises on mileage allowances that do not exceed amounts specified in statute¹. These amounts also form the basis of a claim by the employee where no (or smaller) mileage allowances are payable. As a corollary, no deduction is possible under the usual rules relating to business travel².

For details of the NIC relief of such payments, which is similar but not identical, see E4.723B.

The statutory exemption applies to³:

1. Ìý

   •ÌýÌýÌýÌý 'approved mileage allowance payments' for cars, vans, motor cycles and cycles (as defined in ITEPA 2003, s 235), provided that the employee is not a passenger in the vehicle and the vehicle is not a 'company vehicle' (as defined in ITEPA 2003, s 236)⁴ (note that in Whitby and Ball⁵ relief was found not to be available as the cars in question were company vehicles), and

2. Ìý

   •ÌýÌýÌýÌý 'approved passenger payments' made to an employee for a car or van, provided 'mileage allowance payments' are made