P11d Mileage Allowance Section E should contain the amounts of any excess mileage allowance payments made.
A business can pay their employees an amount for using their personal vehicles for work reasons. HMRC sets out fixed rates that an employer can reimburse their employees at per mile (Mileage Allowance Payments). If an employer chooses to pay more than the HMRC rates, a P11d taxable benefit arises on the excess amount.
What are P11d 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 each tax year.
Currently, these rates are set as follows but you should keep an eye on HMRC for any changes HERE.
|First 10,000 Miles||Over 10,000 Miles|
|Cars and vans||45p||25p|
Payments made to Directors or Employees in EXCESS of the rates set out in the above table will need to be included in the P11d Mileage Allowance Section E.
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 .
That means employees can claim a tax rebate for any unused allowance either through the payroll system or on a self-assessment tax return.
Who Pays P11d Mileage Allowance Tax
Any P11d tax on excess mileage allowance payments are paid by just the employee – there is no Class 1a National Insurance payable by the employer.