The approved maximum tax and national insurance free mileage allowances for employees using their own transport for business are as follows:
Flat Rate
First 10,000 Miles
Miles over 10,000
Car / Van
40p
25p
Motorcycle
24p
24p
Bicycle
20p
20p
Income Tax and NICs are due when allowances exceed these rates. Employees can claim tax relief on any shortfall.
Rates of up to 5p per mile, per passenger, are also tax and NIC free when paid for the carriage of fellow employees on the same business trip.
Fuel-Only Mileage Rates
HMRC advisory mileage rates as at 1 June 2010 for employee private mileage reimbursement or employer reimbursement of business mileage are:
