Hm Revenue And Customs Tax Relief For Expenses Of Employment Page 2

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2
Vehicle expenses of using your own vehicle for work
You can request tax relief for expenses if you use your own car, van, motorcycle or cycle for business mileage.
You cannot get tax relief for any other mileage. In summary, the rules are:
• We may grant tax relief for business mileage for three kinds of vehicle: cars and vans, motorcycles or cycles.
All vehicles of the same kind are dealt with together.
• Any amounts you receive because you use your own vehicle for business mileage are called 'mileage allowance
payments'.
• The mileage rates payable for each kind of vehicle are set by law. The rates are:
Kind of vehicle
Rate
Car or van
45p per mile for the first 10,000 business miles
from 6 April 2011
40p per mile for the first 10,000 business miles
up to and including 5 April 2011
25p per mile after the first 10,000 business miles
Motorcycle
24p per mile (all business miles)
Cycle
20p per mile (all business miles)
• There is a maximum amount you can receive free of tax. This is known as the 'approved amount' and is
calculated by using the mileage rates above, not using actual expenses.
• The approved amount is compared with the total amount of mileage allowance payments you have received.
— If you receive more than the approved amount, you are liable for tax on the excess.
— If you receive less than the approved amount, you can get tax relief on the difference.
• You should keep records of your business mileage and the total amount of mileage allowance payments you
have received.
• Special expenses such as parking or tolls should be included in section 4.
Calculating mileage allowance relief
Cars and vans
Total business mileage
First 10,000 miles (enter the amount up to 10,000 miles)
x 45p (from 6 April 2011) =
1
£
•
x 40p (up to 5 April 2011) =
Over 10,000 miles (enter the amount over 10,000 miles)
2
£
•
x 25p =
3
£
•
Maximum tax-free amount (cars and vans) box 1 plus box 2
Motorcycles
All business mileage
4
£
•
x 24p =
Cycles
All business mileage
5
£
•
x 20p =
Mileage allowance relief
6
£
•
Maximum tax-free amount box 3 plus box 4 plus box 5
7
£
•
Minus total mileage allowance payments received
Total mileage allowance relief
box 6 minus box 7
8
£
•
(If box 7 is more than box 6, enter '0' – no relief is available)
Copy this figure to box 8 on page 4
Page 2

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