Income Tax (Earnings and Pensions) Act 2003 section 233

Passenger payments

Section 233 provides an income tax exemption for approved passenger payments made to employees who carry fellow employees as passengers during business travel in a car or van.

• Passenger payments are amounts paid to an employee for carrying one or more fellow employees as passengers in a car or van during business travel, where the travel also counts as business travel for those passengers.
• The exemption applies where the employee receives mileage allowance payments for the car or van, and where the vehicle is provided by the employer, its cash equivalent benefit is already treated as earnings from the employment.
• The condition about the vehicle benefit being treated as earnings only needs to be satisfied if the car or van is made available to the employee by reason of their employment.
• Passenger payments are "approved" — and therefore exempt from income tax — only to the extent that the total payments in a tax year do not exceed the approved amount set out in section 234.