Income Tax (Earnings and Pensions) Act 2003 section 229

Mileage allowance payments

Section 229 sets out the tax exemption for approved mileage allowance payments made to employees who use their own vehicles for business travel.

• Approved mileage allowance payments are exempt from income tax, provided they do not exceed the approved amount for the relevant type of vehicle in a tax year
• Mileage allowance payments are amounts paid to an employee for expenses related to business use of a qualifying vehicle, but exclude passenger payments
• The exemption does not apply where the employee is merely a passenger in the vehicle rather than the driver
• The exemption does not apply where the vehicle is a company vehicle