Part 4

Employment income: exemptions
Chapter 2

Exemptions: mileage allowances and passenger payments

Mileage allowances

Giving effect to mileage allowance relief
232
1
A deduction is allowed for mileage allowance relief to which an employee is entitled for a tax year.
2
If any of the employee’s earnings—
a
are taxable earnings in the tax year in which the employee receives them, and
b
are not also taxable earnings in that year that fall within subsection (3),
the relief is allowed as a deduction from those earnings in calculating net taxable earnings in the year.
3
If any of the employee’s earnings are taxable earnings in the tax year in which the employee remits them to the United Kingdom, there may be deducted from those earnings the amount of any mileage allowance relief—
a
for that tax year, and
b
for any earlier tax year in which the employee was resident in the United Kingdom,
which, on the assumptions mentioned in subsection (4), would have been deductible under subsection (2).
4
The assumptions are—
a
that subsection (2)(b) does not apply, and
b
where applicable, that the earnings constitute taxable earnings in the tax year in which the employee receives them.
5
Subsection (3) applies only to the extent that the mileage allowance relief cannot be deducted under subsection (2).
6
A deduction shall not be made twice, whether under subsection (2) or (3), in respect of the same mileage allowance relief.
6A
If the earnings from which a deduction allowed under this section is deductible include earnings that are “excluded” within the meaning of section 15(1A)—
a
the amount of the deduction allowed is a proportion of the amount that would be allowed under this section if the tax year were not a split year, and
b
that proportion is equal to the proportion that the part of the earnings that is not “excluded” bears to the total earnings.
7
In this section “taxable earnings” or “net taxable earnings” means taxable earnings or net taxable earnings from the employment for the purposes of Part 2.
S. 232(6A) inserted (with effect in accordance with Sch. 45 para. 153(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 63
Pt. 4 modified (10.6.2021) by Finance Act 2021 (c. 26), s. 26(3)