NHS mileage allowances

Updated 06 August 2008

New NHS car mileage allowances became effective from 01 July 2008 and are outlined in the latest Pay Circular (AforC) 4/2008 (Word, 75KB).

This includes a reference to the requirement in Agenda for Change Annex M for the need to have regular regard to mileage costs when setting rates for lease car users.

Lease cars

Fuel reimbursement for lease cars is not negotiated nationally. Local staff sides should note this circular and ask employers what steps they are taking to ensure that lease car rates are appropriate given the most recent increases in the price of fuel.

HMRC advisory fuel rates are available from the HM Revenue and Customs website: www.hmrc.gov.uk/cars/advisory_fuel_current.htm. If you are paid less than these rates then the shortfall should receive tax relief.

NHS motorcycle allowances

From 01 July 2008, motorcycle allowances have also increased by 10%. For further information, view the AforC pay circular 5/2008 (PDF, 28.7KB) [How to access PDF files].

Tax and mileage allowances

Where reimbursement is less than the HM Revenue and Customs rates, tax relief is available on the shortfall. Where reimbursement is above these rates the excess is subject to tax. These rates apply to all employment settings and not just the NHS. Please note details are subject to change.

For further information, please go to: Cars and tax information sheet (Word, 35KB).