SEARCH, INDEX, UPDATES, CONTENTS, INFORMATION, ADDITIONAL PASSENGER RATE (APR)
APR is an acronym which has referred to the Annual Percentage Rate for borrowing for a number of years. It can now have another meaning which may be more interesting.
From the 6 April 2002, an employer can pay a tax and NI free allowance to an employee who takes fellow workers on a business trip in his vehicle.
At 5p per mile the allowance may not seem generous, but 3 fellow passengers doing a 200 mile round trip equals £30 (worth more than £50 gross to a higher rate taxpayer).
The employer claims the payment as a tax deductible expense, and may save the cost of other workers travelling independently.
Any driver of a company car or van, provided they are assessable to a benefit in kind on that vehicle, can be paid APR.
The allowance also applies to an employee providing his own car, and is additional to any RAMR payment. Unlike an RAMR payment, it cannot be claimed as a tax deductible expense by the employee if it is not paid by the employer.
Employee's use of their own cars should always be on condition that they have liability insurance cover for such business use. This is particularly important when carrying passengers. The expense of such cover is a tax deductible expense, see Inland Revenue Tax Bulletin 19.
See also -
Mileage Rates (Fuel Only) - new advisory figures for 2002.
Mileage Rates (RAMR) - Revenue Authorised Mileage
Rates for employee owned cars.
Mileage Record - print this handy form to record your business
mileage
VAT in Mileage Allowances - can be reclaimed by
some VAT registered businesses.
Business Cars - the rules on tax relief
Car Fuel Benefit - changes from 5 April 2003.
Car Policy - is a company or firms car and fuel
worthwhile?
Travel and Subsistence - new rules on
commuting since 6 April 1998 - are you complying?
Reminder - disclaimer applies. Please feedback your comments. This page was last modified 1 September 2002.