HMRC’s nomenclature of the term 'business mileage' thus implied that you can claim a reduction on tax, for this purpose. How and when can you avail this benefit?
Employees are liable to get a 'mileage allowance' if they make use of their private cars/bikes for corporate journeys. Moreover, this could also be free from any taxation and NI, provided that the calculated summation is not larger than the AMR's which are approved by HMRC.
An additional deduction on taxation is liable when the mileage that occurs on a corporate journey is larger than that of the worker's regular travel route, and when they have not been given a due AMR reimbursement to cover up for the additional miles they have had to travel, for corporate purposes.
In order to be liable for an AMR compensation, the journey has to be mandatory to the need of an employee doing the requirements of their job. However, if there occurs a destination which does not have relevance to the job (in the route travelled by the employee), then it cannot be deemed as being a journey that qualifies for AMR. This can be found in HMRC’s Guidance Notice 490.
Nevertheless, if a corporate journey commences or ends (or both) at the residence of the employee, and the mileage overcome is larger than that for which the worker gets a mileage compensation from their hirer, then they are eligible to demand a reduction on taxation (at HMRC’s verified rates) for the cost incurred.
Employees may be liable to claim a tax deduction only if their mileage increases the allowance which you provide them with, as an employer.
Do you have planned business trips?
Contact us to find out if you are qualified for a tax deduction.