Many employers pay a standard rate of mileage to all employees who use their own cars for business. The maximum rates that can be paid tax-free have increased from 6 April 2011, although many employers appear to be unaware of the increase.
The new rates as of 6 April 2011 are as follows:
Car
Up to 10,000 miles – 45 pence per mile (previously 40 pence)
Over 10,000 miles – 25 pence per mile
Furthermore, the employer is able to pay an additional 5 pence per mile tax-free to the employee if they take a fellow employee on a business journey as a passenger.
Motorcycles and Cycles remain the same as previous years at:
Motorcycles – 24 pence per mile
Cycles – 20 pence per mile
If you are paid for business miles at less than the authorised rate, you can write to HMRC and ask for tax relief on the difference.
