For Employees Using Their Own Transport

The approved maximum tax and national insurance free mileage allowances for employees using their own transport for business are as follows:

Flat Rate

First 10,000 Miles

Miles over 10,000

Car

40p

25p

Motorcycle

24p

24p

Bicycle

20p

20p

Income Tax and NICs are due when allowances exceed these rates. Employees can claim tax relief on any shortfall.
Rates of up to 5p per mile, per passenger, are also tax and NIC free when paid for the carriage of fellow employees on the same business trip.

Fuel-Only Mileage Rates

HMRC advisory mileage rates as at March 2007 for employee private mileage reimbursement or employer reimbursement of business mileage are:

Petrol

Diesel

LPG

Up to 1400cc

9p

9p

6p

1401cc - 2000cc

11p

9p

7p

Over 2000cc

16p

12p

10p

Income tax and NICs may be due on higher rates and tax relief may be due on lower rates.