🚗 Business Mileage Payments: Tax Rules Every Employer Must Know! 💼💰

🚗 Business Mileage & Tax: What Every Employer Should Know! 💼💰 

 

If your employees use their own vehicle for business travel, you can reimburse them through Mileage Allowance Payments (MAPs) but there are important tax rules to follow! 

 

✅ Approved Mileage Rates (2024): 

 

🔹 Cars & Vans – 45p per mile (first 10,000 miles), 25p per mile after 

 

🔹 Motorcycles – 24p per mile (flat rate) 

 

🔹 Bicycles – 20p per mile (flat rate) 

 

🚙 Example: 

 

If an employee drives 12,000 business miles in their car: 

 

✔ 10,000 miles × 45p = £4,500 

 

✔ 2,000 miles × 25p = £500 

 

💰 Total approved amount = £5,000 

 

📊 How Does This Affect Tax? 

 

💼 If you pay ABOVE the approved rate → You must report the excess on form P11D and deduct tax through payroll. 

 

💡 If you pay BELOW the approved rate → Employees can claim Mileage Allowance Relief (MAR) to reduce their tax bill. 

 

🚗 Extra Benefits & Reporting Options 

 

✔ If employees carpool, they can receive an extra 5p per mile per passenger tax-free! 

 

✔ You can simplify reporting by joining the Mileage Allowance Relief Optional Reporting Scheme (MARORS)—contact HMRC to register. 

 

✔ Employees using their own vehicle for COVID-19 volunteer work can also receive MAPs, but these must be taxed through a PAYE Settlement Agreement. 

 

📢 Don’t Miss Out! 

 

Stay compliant & help employees claim the tax relief they deserve! 💼💸 

 

Tag a business owner, freelancer, or HR professional who needs to know this! 👇 

 

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