Cookies are small text files that are stored on your computer when you visit a website. They are mainly used as a way of improving the website functionalities or to provide more advanced statistical data.
Excess mileage payments
Fixed quotes for agreed services ››Newsletter issue – June 2023
Petrol and diesel pump prices are high, but the tax-free mileage rates (see table) payable to employees who use their own vehicles on business haven‘t been adjusted for over a decade.
Vehicle |
First 10,000 miles per year |
Above 10,000 miles per year |
Cars and vans |
45p |
25p |
Motorcycles |
24p |
24p |
Many employees just can‘t afford to use their own car or motorbike for business journeys if they only get reimbursed at these rates, so some employers pay more. But any excess above the tax-free rate is taxable, and subject to NIC.
If you have paid your employees higher mileage rates than in the table above, you need to treat those excess amounts as extra salary and put them through the payroll. You also need to communicate this treatment to the affected employees.
Where the employee‘s own car is purely electric you can still pay up to the rates in the above table for business journeys, tax and NIC-free.
Where the employee charges their private electric car at a charging point at work for free, there is no taxable benefit for the employee on using that electricity. Things get more complicated if you reimburse your employee for the cost of charging their private electric car at their home, or at a road-side charging point.
Book a Free ConsultationBooking a free initial consultation is a cost-free way of making an initial enquiry to find out if we can help with your tax issue and is all part of the commitment to you.
Request a CallbackWe know you're busy, so if you want us to call you back just leave your details in the form below and we will call you back at a more convenient time.
