Part 4

Employment income: exemptions
Chapter 2

Exemptions: mileage allowances and passenger payments

Passenger payments

Passenger payments
233
1
No liability to income tax arises in respect of approved passenger payments made to an employee for the use of a car or van (whether or not it is a company vehicle) if—
a
the employee receives mileage allowance payments for the use of the car or van, and
b
the cash equivalent of the benefit of the car or van is treated as earnings from the employment by virtue of section 120 or 154 (cars and vans as benefits).
This is subject to subsection (2).
2
The condition in subsection (1)(b) needs to be met only if the car or van is made available to the employee by reason of the employment.
3
Passenger payments are amounts paid to an employee because, while using a car or van for business travel, the employee carries in it one or more passengers who are also employees for whom the travel is business travel.
4
Passenger payments are approved if, or to the extent that, for a tax year, the total amount of all such payments made to the employee does not exceed the approved amount for such payments (see section 234).
5
Section 117 (when cars and vans are made available by reason of employment) applies for the purposes of subsection (2).
Pt. 4 modified (10.6.2021) by Finance Act 2021 (c. 26), s. 26(3)