If approved benchmark or bespoke rates are used, the employers must have a checking system in place. This is to ensure that the employee is incurring and paying the amounts in respect of expenses of the same kind, and that the tax relief would be allowed. Exemption is also conditional on neither the payer, nor anyone operating the checking system, suspecting or reasonably being expected to know or suspect that the employee had not incurred an amount in respect of the expense.
The HMRC have issued guidance on what checking systems they will expect employers to operate. We can assist you with this matter or in applying for bespoke rates so please contact us for more information.
The business mileage rates
The main travel and subsistence expenses for many employees are their costs in using their own car or van for business travel. Many employers and their employees use the statutory mileage allowances known as ‘authorised mileage allowance payments’ (AMAPs). These are scale amounts that employers can pay to employees using their own vehicle for business travel. The scale rate for cars and vans is 45p per mile for up to 10,000 miles in the tax year and 25p per mile above this. AMAPs are a separate statutory regime and do not come within the new exemption regime.
If the employer provides a vehicle to the employee, the fuel advisory rates can be used to reimburse fuel costs incurred in travelling on business. These rates are updated quarterly throughout each tax year.
If your company operates in Swanley, Bromley, Kent and London areas, Adiva Accountants in Swanley can advise you on the business mileage rates. Please do not hesitate to contact us at Adiva Accountants in Swanley.