Company cars: statutory mileage allowance - part 3

Julie Clift, tax writer at Croner-i, looks at the tax implications when a company reimburses an employee for using their own car on company business, taking into account the latest statutory mileage rates

An employee may choose to use their own car rather than be provided with a company car. Where the employer makes approved mileage allowance payments as payment for the business use of a privately-owned qualifying vehicle, no tax charge arises (Income Tax (Earnings and Pensions) Act 2003, s229).

The statutory mileage rates for 2019-20 are:

For a car or van: 45p for the first 10,000 business miles, 25p for additional business miles;
24p for a motorcycle;
20p for a bicycle, and;
5p for a passenger payment.