Employee Business Mileage Records Explained

Employees and directors are required to keep a detailed record of journeys for which they receive a mileage allowance from their employer or where they claim a tax deduction for business travel. A copy of the record should be retained by the employer and by the individual.

Personally Owned cars

Employers can pay directors and employees tax and NI-free allowances for business mileage at rates shown in the table below. These are known as approved mileage allowance payments (AMAPs).

Where the sum paid by the employer is less than the tax and NI-free amount, the director or employee is entitled to claim a tax deduction for the difference.

Director/employee owned car

Tax-free amount

NI-free amount

First 10,000 miles of business travel per tax year

45p

45p

Subsequent business travel

25p

45p

Allowance for taking passenger on business journey

5p

5p

Company cars

An employer may also reimburse a director or employee for the cost of fuel for business journeys travelled in a company car. The payments can be made tax and NI free. HMRC publishes recommended mileage rates for reimbursement, which are updated quarterly. These are referred to as “advisory fuel rates”.

You can find out about Advisory Fuel Rates (AFR) for company car users, when you can use them, and how they’re calculated here.

For more information, we provide a Business Consultation to ensure our clients benefits from tax planning and accounting matters.

For any assistance contact Companies999, we will be happy to help you!

Leave a Reply

Your email address will not be published. Required fields are marked *