Many employers pay mileage rates to employees who use their own cars, pedal cycles or motorcycles for business. The Inland Revenue authorised mileage rates (AMRs) provide a simplified system and an easy guide for employers to the level of mileage allowances that may be paid free of income tax and NICs to employees who use their own cars, pedal cycles and motorcycles for business travel.

Authorised Mileage Rates - This Year (2002/03)

The previous system of authorised mileage rates was replaced in April 2002. The rates geared to a car's engine size were replaced by a single rate for all cars and vans.

This rate is the amount an employer is able to pay up to per mile without generating a tax or NIC charge. Employers no longer need to report payments of mileage rates up to the statutory rate.

Dispensations no longer apply to payments related to mileage rates paid for business travel.

Inland Revenue authorised rates for the tax year 2002/03 are as follows:

	Up to 10,000 miles	Excess over 10,000 miles
Cars & Vans	40p per mile	25p per mile
Motorcycles	24p per mile	24p per mile
Pedal Cycles	20p per mile	20p per mile

In addition, employers may pay up to 5p per mile free of tax/NIC for each passenger carried. The passenger must be a fellow employee making the same business trip. This measure applies only where employers pay extra for carrying passengers. Where there are no payments for carrying business passengers, employees will not be able to claim any tax relief.


Authorised Mileage Rates - 2001/02

The Inland Revenue authorised rates for the tax year 2001/02 were as follows:

	Up to 4000 miles	Excess over 4000 miles
Cars
Engine Size:
Upto 1,500cc	40p per mile	25p per mile
1,501 to 2,000cc	45p per mile	25p per mile
Over 2,000cc	63p per mile	36p per mile
Motorcycles	24p per mile	24p per mile
Pedal cycles	12p per mile	12p per mile

Authorised Mileage Rates - 2000/01

The Inland Revenue authorised rates for the tax year 2000/01 were as follows:

Please note that, other than the introduction of rates for motorcycles and pedal cycles in April 2000, these rates remained unchanged from April 1997 until April 2001.

	Up to 4000 miles	Excess over 4000 miles
Cars
Engine Size:
Upto 1,000cc	28p per mile	17p per mile
1,001 to 1,500cc	35p per mile	20p per mile
1,501 to 2,000cc	45p per mile	25p per mile
Over 2,000cc	63p per mile	36p per mile
Motorcycles	24p per mile	24p per mile
Pedal cycles	12p per mile	12p per mile

Mileage Log

To claim business mileage allowances, you do need to keep a detailed log of business mileages. Our Mileage Claim Form provides a means of keeping this record.

Merchants Warehouse Market Square Hull    HU1 2JJ
Telephone: 01482 212057 Fax: 01482 217102 E-mail: info@majors.co.uk

© Majors, Chartered Accountants, 2002;  Updated 25 April 2002