Hopefully, you know the tax implications of having employees use a personal car for business reasons. But, what happens if an employee carries another worker in a personal car for business journeys?
Let's go over passenger payments on your tax bill.
Businesses can pay traveling employees up to 5p per mile tax-free if the employee uses a personal car for business reasons and carries another employee in the car or van. This can be in addition to the Mileage Allowance payments.
No. If you're paying passenger payments, you don't have to report it to the HMRC. You also don't have to deduct taxes from this or pay National Insurance, either.
There's no law requiring you to pay more if an employee carries multiple other employees on business journeys.
No. The HMRC doesn't provide an equivalent of the Mileage Allowance Relief. That is, you don't get tax relief if you carry another employee and aren't compensated.