EIM31355 | Employees using own vehicles for work: examples: mileage allowance payments at pence per mile rate

Section 230 ITEPA 2003

This page illustrates the calculation of chargeable mileage allowance payments and mileage allowance relief (EIM31235) where payments are made on a pence per mile basis for business travel (EIM31260) in an employee’s own vehicle.

Example one: for 2025 to 2026

Employee A uses their own car for business travel. In the tax year 2025 to 2026 employee A does 5,000 business miles in it and is paid 49 pence per mile.

Step one: find the amount of mileage allowance payments (MAPs) received

MAPs received: 5,000 × 49 pence = £2,450

Step two: deduct the approved (exempt) amount (see EIM31230)

Approved amount: 5,000 × 45 pence = £2,250

Step three: is the answer positive or negative?

The answer is positive:

• excess over AMAPs is taxable and reported on P11D, in this example the amount in excess over AMAPs is £200

• AMAPs exempt amount is £2,250

Example two: for 2025 to 2026

Employee B uses their own car for business travel. In the tax year 2025 to 2026 employee B does 12,000 business miles in it and is paid 35 pence per mile.

Step one: find the amount of mileage allowance payments (MAPs) received

MAPs received: 12,000 × 35 pence = £4,200

Step two: deduct the approved (exempt) amount (see EIM31230)

• first 10,000 miles at 45 pence: 10,000 × 45 pence = £4,500

• additional miles at 25 pence: 2,000 × 25 pence = £500

• total exempt amount = £5,000

Step three: is the answer positive or negative?

The answer is negative:

• mileage allowance payments received: £4,200

• approved exempt amount: £5,000

• mileage allowance relief available (EIM31330): £800 (£5,000 - £4,200)