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Taxes

What Are Passenger Payments On My Taxes?

Marin Perez
April 26, 2019
Man and woman driving and chatting: Passenger Payments on Taxes

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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.

What are passenger payments?

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.

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Do businesses have to report passenger payments to the HMRC?

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.

Do you have to pay more with multiple passengers?

There's no law requiring you to pay more if an employee carries multiple other employees on business journeys.

Can I get mileage allowance relief?

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.

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MileIQ: Mileage Tracker & Log

MileIQ Inc.

GET — On the App Store

View
MileIQPricing
Open MenuClose Menu

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.

What are passenger payments?

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.

Do businesses have to report passenger payments to the HMRC?

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.

Do you have to pay more with multiple passengers?

There's no law requiring you to pay more if an employee carries multiple other employees on business journeys.

Can I get mileage allowance relief?

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.

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