NHS mileage allowances

Updated 22 December 2009

HMRC mileage advisory rates

If you use a lease car for work it is likely that you will only be reimbursed for the cost of fuel. Twice a year the HMRC publish advisory rates for fuel reimbursement. The latest figures are available on the HMRC website and are affective from 01 December 2009.

Employers are not obliged to reimburse only at these rates. Reimbursement above the rate will be subject to tax and below tax relief may be applied for.

06 August 2008 update

New NHS car mileage allowances became effective from 1 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.

A review of the allowances is ongoing and more than 90 consultation responses have been received by NHS Staff Council. The working group received agreement from the council to continue work to develop a new system and they are currently exploring a single mileage rate for all business use in the NHS.

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 1 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: Mileage rates June 2010 (Word 60KB).