3 minute read.

This Q&A answered by Arthur Weller was featured in Tax Insider Professional in September 2019. Start your free trial today to read all previous Q&As and articles.

5 minute read.

The Approved Mileage Allowance Payments system only applies where an employee uses his or her own car for business journeys. It does not apply where the employee has a company car.

5 minute read.

Employers can also pay a tax-free allowance to employees who give lifts to passengers for whom the journey is also a business journey.   

The approved amount is found by the formula  M x R  

3 minute read.

Employers can also pay mileage allowance payments free of National Insurance contributions as long as the amount paid does not exceed the approved amount. The mileage allowance scheme for National Insurance purposes is similar to that applying for tax purposes (see Tip 7), but with one key difference – the rate for cars and vans is 45p per mile regardless of the number of business miles driven.

2 minute read.

Where an employer does not pay a mileage allowance to an employee who uses his or her own car for work or pays an allowance which is less than the approved amount, the employee can claim tax relief for the shortfall. This can be done in the employee’s self-assessment return, on form P87 or by writing to HMRC.

3 minute read.

The Approved Mileage Allowance Payments (AMAPs) scheme allows employers to pay tax-free mileage allowances to employees who use their own cars for business journeys, as long as the allowance paid does not exceed the approved amount.

2 minute read.

As explained in Tips 2 and 3, from 6 April 2017 alternative valuation rules apply to work out the taxable value for most benefits where provision is made via an optional remuneration arrangement, such as a salary sacrifice scheme.

3 minute read.

Even if a benefit is not exempt from tax and National Insurance, it can still be beneficial from the employee’s perspective to choose the benefit rather than cash salary, as this will save the employee Class 1 National Insurance contributions.  

4 minute read.

Although the alternative valuation rules for benefits provided under optional remuneration arrangements (OpRAs) apply generally from 6 April 2017 (see Tip 3), transitional rules applied to arrangements in existence on 5 April 2017, the effect of which is to delay the date from which the alternative valuation rules apply.

3 minute read.

The benefits of using a salary sacrifice or other optional remuneration arrangement (OpRA) were seriously curtailed from 6 April 2017 following the introduction of alternative valuation rules that apply where a benefit or expense is provided via an OpRA. The definition of an OpRA includes not only salary sacrifice schemes, but also flexible benefit arrangements and arrangements, such as cash or cash, where the employee is offered the choice between a non-cash benefit and a cash alternative.