Income Tax (Earnings and Pensions) Act 2003

232 Giving effect to mileage allowance relief

(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.

(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.