NIM05702 | Class 1 NICs: Expenses and allowances: Mileage allowances: Normal components of a mileage allowance

The normal components of a mileage allowance are:

• fuel

• oil and other lubricants

• the additional insurance costs incurred as a result of using a car for business related travel

• road fund licence

• servicing, repairs and replacements

• depreciation.

Although the payment of mileage allowances is one way employers reimburse employees the costs they incur using a privately owned car for business travel, employers may choose to meet the cost by:

• repayment of the exact costs involved, see NIM05020

• regular round sum allowances, see NIM06160

• supplying fuel from their own fuel pump, see NIM05662

• requiring the employee to use a garage with which the employer has an account, see NIM05662

• providing fuel vouchers, NIM05662

• supplying the employee with a company credit card or fuel agency card, see NIM05662