This new exemption will not, however, apply to expenses or benefits in kind provided under a relevant salary sacrifice arrangement. This includes any arrangement where employees give up the right to receive earnings in return for tax free expenses payments, or where the level of their earnings depends on the amount of any expenses payment. After 5 April 2016 any expenses payments you pay to employees under these arrangements will need to be paid after deducting tax and NICs.
All current dispensations agreed with HMRC will no longer apply after 5 April 2016.
Advisory Mileage Allowance payment (AMAP) and Advisory Fuel Rates (AFRs)
If you have employees who travel for work purposes (excluding normal commuting) in their own vehicle you will still be able to reimburse them using the AMAP rate. (Currently, up to 45p per mile for the first 10,000 business miles and 25p per mile thereafter.) Employees receiving less than the AMAP rates for business travel will still be able to claim Mileage allowance relief (MAR) on the difference. Employees carrying out business travel in a company car, and not getting employer provided fuel, will still be able to receive fuel payments based on our AFRs. Employees can claim a tax deduction for non-reimbursed fuel costs using the existing rules.