P11d Form Section E: Mileage Allowance Payments

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P11d Section E Mileage Allowance Payments should contain the amounts of any excess mileage allowance payments made.

What are Mileage Allowance Payments

Mileage Allowance Payments are approved amounts Directors and employees can claim as an allowable business expense for business miles travelled in personal vehicles, whilst remaining free from any additional tax and NI.

The Mileage Allowance Payment rate set by HMRC does not just cover fuel, it is also set so that it reflects a fair amount for depreciation, maintenance and insurance.

Mileage Allowance Payments rates can be subject to change.  Currently these rates are set as follows but you should keep an eye on HMRC for any changes HERE.

Type of vehicle First 10,000 miles Above 10,000 miles
Cars and vans 45p (40p before 2011 to 2012) 25p
Motorcycles 24p 24p
Bikes 20p 20p

Payments made to Directors or Employees in excess of the rates set out in the above table will need to be included on a P11d form.

Where Mileage Allowance Payments are made either equal to or less than the approved HMRC rates then no entry needs to be made on the P11d form.  If employees have received less than the mileage allowance payment rate for business mileage, then they may be able to claim for Mileage Allowance Relief meaning you get a tax rebate for any unused allowance either through the payroll system or on a self assessment tax return.

Who Pays Tax on Section E Mileage Allowance Payments

Tax on excess mileage allowance payments are paid by just the employee – there is no Class 1a National Insurance payable by the employer.

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