Richard Curtis outlines HMRC’s approved mileage allowance regime.
Substantial increases in tax charges over the years have removed much of the attraction of company cars; employees will often, instead, use their own car for employment purposes.
The tax legislation (in ITEPA 2003, s 336) provides a general rule that a deduction can be claimed for expenses that are incurred ‘wholly, exclusively and necessarily in the performance of the duties of the employment’. However, section 359 states that this rule does not apply if mileage allowance payments are made to the employee for the use of their own vehicle, or if mileage allowance relief is available.
Mileage allowances
Instead of the general rule for the deduction of expenses as above, ITEPA 2003, s 229 et seq provides the mileage allowance regime for the costs of business travel in an
