NIM05705 | Class 1 NICs: Expenses and Allowances: Mileage allowances: Types of mileage allowances

Mileage allowances may be based on a:

• fixed mileage rate paid for each mile travelled which includes all of the expenses associated with running a car

• fixed mileage rate paid for each mile travelled to cover only the cost of fuel, plus a separate payment for associated running costs

• round sum allowance which has no reference to the amount of miles travelled or any other considerations

• monthly or annual lump sum based on an estimate of the costs likely to be incurred in using the car

• combination of the above.

Most employers pay mileage allowances for business travel only but some may also pay allowances for private miles.