Calculator for mileage expenses (business use of own car in UK). It calculates the "approved amount" that can be claimed tax-free by an employee for using their own car as business travel expenses.
Some facts#
- If the employee uses their own vehicle for business journeys, the employer can reimburse their car usage expenses. This is called The Mileage Allowance Payments (MAP).
- The "approved amount" or "qualifying amount" is tax free:
- Employer is allowed to pay the employee a certain amount of MAP each year without having to report them to HMRC.
- That amount is called "the approved amount" for the income tax purposes.
- That amount is called "the qualifying amount" for the NI purposes.
- That amount is also allowed expense from the CT (Corporation Tax) perspective.
- The tax-free MAP depends on distance travelled strictly for business purpose. To calculate the "approved amount", multiply business travel miles for given year by the rate per mile for their vehicle.
- The per-mile rate depends on vehicle's type. Also, this rate is decreased after 10,000 miles distance reached within single tax year for cars and vans.
- Current (from 2016/2017 to 2019/2020 tax years) Mileage Allowance Payment (MAP) rates are summarised below:
- cars and vans: 45p (25p after 10,000 miles threshold reached)
- motorbikes: 24p
- bikes: 20p
- It doesn’t matter if the employee uses more than one vehicle in a year. It’s all calculated together.
ⓘ Example: Employee traveled 12,000 business miles. Mileage Allowance Payment is:
MAP=10,000×45p+2,000×25p=5000GBP
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