Don’t forget that from 6 April 2011 the HMRC approved amount you can claim for the business use of your own car is 45p per mile (previously 40p per mile).
The 45p rate applies to the first 10,000 business miles claimed in a tax year, after that the rate reduces to 25p per mile.
Employers are not obliged to pay at this rate but any rate paid up to 45p per mile will be effectively tax free to the recipient. Any payments in excess of 45p would need to be declared as a taxable benefit unless the recipient could prove that their actual motoring costs equalled or exceeded 45p per mile.
If employers pay, or have paid, less than 45p per mile (40p before 6 April 2011) employees can make a claim. For instance if an employer pays £25p per mile after 6 April 2011, the employees could claim 20p per mile on their tax return as an expense of their employment that they have not been reimbursed.