Mileage allowance relief only applies to tax. It has no relevance for NICs.

The guidance on our two schemes explains the tax and NICs treatment of mileage payments. Follow this link for more guidance on the tax approved mileage allowance payments scheme.

When an employee is paid less than the maximum they could receive tax-free, or is paid nothing, he or she is entitled to tax relief for the difference between the amount they receive and the maximum. This tax relief can be set against any employment income.

The tax relief is called mileage allowance relief and you can find more detailed guidance at EIM31330 onwards.

Level 3 Table of Contents