It is a quite normal practice for employees to be reimbursed for business use of their own car/van or motorcycle.
However, many businesses don’t know that they can offer their employees an HMRC approved Mileage Allowance Payment (MAP) of up to 20p per mile, if they use their privately owned bicycle to travel for business use.
This enlightened approach to business travel could offer several benefits, such as:
- 20p per mile would not give rise to a tax liability for the employee
- Kinder to the environment
- Healthier & happier employees
- Lower costs for the business
The employee should record their business mileage on an expense claim form, providing the following information:
- The date and reason for the journey
- The starting point, places visited on route and the point at which the journey ended
- Names and addresses of persons visited.
- Mileage claimed for each trip
If an employee is paid less than 20p per mile, they will be able to make a claim to HMRC for tax relief on the difference (Mileage Allowance Relief). This relief will be used to reduce the amount of tax due on their wages. To make a valid claim they will need to keep a record of their business mileage and the MAPs made by their employer.
NB: Business Mileage Allowance cannot be claimed for normal home to/from office mileage.