If you’re an employer and your staff use their private vehicles for business travel, you can offer them a mileage allowance. This isn’t an obligation but it really is a fantastic perk that employees always appreciate.
The amount that you offer is up to you, with HMRC’s recommended rate being the following:
First 10,000 miles
Cars and vans = 45p
Motorcycles = 24p
Bikes = 20p
Above 10,000 miles
Cars and vans = 25p
Motorcycles = 24p
Bikes = 20p
Employees that are reimbursed at the approved rates or under don’t have to report it to HMRC. Anything above the current rate will need to be reported by the company via a P11D form, plus the amount needs to be added to the employee’s wages so that they can pay tax on it. To keep things simple, we suggest sticking to the approved rates listed above.
Needless to say, you have to maintain records of any mileage allowance you pay out. This should be in the form of each employee keeping an individual mileage log, outlining details of their business travel for each calendar month.
We provide the highest standard of tax management to businesses across the UK. For more information, please call our Yorkshire office on 01482 235575, our London office on 0207 885 0605, or fill in our contact form.
