Here are the steps needed to Enter and report on Mileage allowance payments 

1. Set Up Mileage Allowance Payments

• You can record mileage payments for employees who use their own vehicles for business travel. This helps you keep accurate records for payroll and HMRC reporting.
• Go to the relevant employee’s payslip.
• In the Additions and Deduction section, add a new mileage allowance payment.
• Enter a title for the payment and tick or untick the appropriate deduction boxes.
• If you want this addition to be available for other employees in the future, tick the Reuse box to save this addition type.

2. Enter Mileage Details

• Manually enter the mileage payment amount for the employee.
• For help calculating the correct amount, see here
• Check the payslip to make sure the mileage payment is recorded correctly.
• Finalise the payslip as you normally would.

3. Reporting Mileage Allowance Payments

• To track these payments, create a custom report:
• Go to the reporting section and create a new report.
• Select the relevant pay schedule and period, and include the employees you want to report on.
• Add the mileage allowance field under the Columns section by clicking the Add/Remove button.
• Run the report to view and track mileage payments. You can also save this report for future use.

4. HMRC Reporting

• Mileage allowance payments up to HMRC-approved rates are not taxable and do not need to be reported on the Full Payment Submission (FPS).
• If you pay more than the approved rates, the excess must be reported, is subject to tax, and National Insurance.
• Any excess paid above the approved rates should be reported on the employee’s P11D form as a benefit at the end of the year.