Documents for Business
In excess of 1,000 customisable documents covering every conceivable business issue.Introduction to this document
Employee business mileage record
Employees and directors are required to keep a record of journeys for which they receive a mileage allowance from their employer or claim a tax deduction for business travel. A copy of the record should be retained by the employer and by the individual.
Personally owned cars
Employers can pay directors and employees tax and NI-free allowances for business mileage at rates shown in the table below. These are known as approved mileage allowance payments (AMAPs).
Where the sum paid by the employer is less than the tax and NI-free amount, the director or employee is entitled to claim a tax deduction for the difference. Where the mileage allowance exceeds HMRC’s approved rate the difference is a taxable benefit and liable to Class 1 NI as earnings.
Director/employee-owned car | Tax-free amount | NI-free amount |
First 10,000 miles of business travel per tax year | 45p | 45p |
Subsequent business travel | 25p | 45p |
Allowance for taking passenger on business journey | 5p | 5p |
Company cars
An employer may also reimburse a director or employee for the cost of fuel for business journeys travelled in a company car. The payments can be made tax and NI free. HMRC publishes recommended mileage rates for reimbursement, which are updated quarterly. These are referred to as “advisory fuel rates”. You can find the current rates by visiting: https://gov.uk/government/publications/advisory-fuel-rates.
