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

From HM Revenue & Customs · Employment Income Manual

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)