How much can you claim for the costs of business travel? How much can be reimbursed by an employer towards the costs of qualifying business travel?
This is a freeview 'At a glance' guide to employee business travel and authorised mileage rates, also known as Approved Mileage Allowance Payments (AMAPs).
At a glance
These authorised mileage rates set the amounts that:
- An employer can reimburse an employee for their Business travel, free of tax and National Insurance Contributions (NICs), unless a different rate has been authorised by HMRC.
- An employee, who has not been reimbursed for their business travel, may claim as a deduction against their employment income, unless they agree a different rate with HMRC.
- A self-employed person or landlord can claim as a deduction in their business accounts in respect of Self-employed business travel, instead of making a claim for their actual expenses.
Cars and vans
|
|
Tax free (per mile) |
NICs free (per mile) |
|
First 10,000 miles |
45p (from 6 April 2011) 40p (up to 6 April 2011) |
45p (from 6 April 2011) 40p (up to 6 April 2011) |
|
10,001 and over |
25p |
45p (from 6 April 2011) 40p (up to 6 April 2011) |
- These rates can be used by both the self-employed and employees/directors.
- From 6 April 2018, they are also available to unincorporated Property businesses.
- These rates also apply to electric and hybrid cars: they are not fuel-specific.
- These rates have remained unchanged since 2012.
On 1 December 2017, the government announced it had considered the position and would not be revising its approach to AMAP following HMRC's Taxation of employee expenses: response to the call for evidence.
Car allowances - disregard for NIC
Where employees use their own car for work, relief from income tax and an equivalent disregard from Class 1 can be due based on business miles driven. This applies to potential and anticipated use of a vehicle and is not limited to payments relating to actual use.
This affects those receiving fixed sum car allowance payments made in anticipation or potential use of a qualifying vehicle. A refund of overpaid contributions may be claimed where car allowance payments have been made and NIC has been paid on amounts for previous periods which are no longer due.
Car mileage payments: a National Insurance Contributions (NICs) oddity
Provided that the employer reimburses an employee at the AMAPs rates above there is no PAYE or NICs liability.
While the authorised rate decreases to 25p per mile over 10,000 miles for Income Tax purposes, it remains at 45p per mile for NICs purposes.
Passengers, motorbikes and bicycles
The rates are the same whatever the business mileage.
| Claimant | Rate per mile |
| Passenger | 5p |
| Motorcycle (including electric bikes that are not electrically assisted pedal cycles) | 24p |
| Cyclist (including electric bikes that are electrically assisted pedal cycles) | 20p |
Details of what constitutes an 'electrically assisted pedal cycle' can be found here.
Home to work travel
Home to work travel is generally regarded as commuting and a mileage allowance may not be claimed.
COVID-19 changes
COVID-19 may have had the effect of making many employees home based on a temporary or permanent basis. The Employee travel rules should be reviewed according to each case.
Small print - Legislation
Sections 229-230 ITEPA 2003: vehicles
Sections 233-234 ITEPA 2003: passenger payments