How much car mileage can I claim through my business?

What is a mileage claim?

A mileage claim is when you ask for money back for using your own vehicle for work purposes. It covers the miles you drive for business tasks, such as visiting clients, travelling between work sites or attending meetings away from your usual workplace. Regular commuting to and from work does not count.

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Vehicles eligible for HMRC mileage claim

You can claim for cars, vans, motorcycles and bicycles. Each vehicle type has its own mileage rate.

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Mileage that qualifies for reimbursement

Business travel includes:

• Travelling to a temporary workplace.
• Visiting clients or suppliers.
• Moving between workplaces during the same employment.
• Travel from home to another workplace if your home is your main base for work.

Travel between home and a permanent workplace is classed as commuting and is not covered.

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Mileage tracking made easy

To make a claim you must keep a clear record of all your business miles. This includes the date, where you went, why you travelled and the total miles for each journey. Good record keeping is important if HMRC checks your claim.

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HMRC mileage rates

The current mileage rates are:

• Cars and vans: 45p per mile for the first 10,000 miles, 25p per mile after that.
• Motorcycles: 24p per mile.
• Bicycles: 20p per mile.

These rates cover the costs of running your vehicle for work, such as fuel, servicing and insurance.

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Expenses covered by the HMRC mileage rates

The mileage rates include:

• Fuel
• Servicing and repairs
• Maintenance
• Insurance and road tax
• Depreciation

Extra costs you can claim separately if allowed include parking fees and tolls, but fines cannot be claimed.

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Mileage claim rules

For employees

Employees can be reimbursed for business miles through Mileage Allowance Payments (MAPs). If your employer pays you at or below the approved rate, there is no tax to pay. If they pay more, the extra is taxed. If they pay less, you can claim Mileage Allowance Relief (MAR) from HMRC.

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HMRC mileage rates for employees

The same rates apply as above. All vehicles and miles are added together for the calculation

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Records for your mileage claim

To claim, you must keep a mileage log showing:

• Date of each journey
• Start and end addresses
• Miles driven
• Reason for the trip

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Car allowance

Some employers give a car allowance instead of a company car. This is treated as income and taxed, but you can still claim relief on business miles if the allowance does not cover them fully.

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For self-employed individuals

Self-employed people can claim business miles using:

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Simplified expenses method

A flat rate per mile for business travel. Rates are the same as HMRC’s mileage rates. You can also claim for things like parking or public transport costs.

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Actual vehicle costs claim

You can claim the actual costs of running your vehicle for work, such as fuel, repairs, servicing and insurance. You must keep receipts and records. Only the business proportion of costs can be claimed.

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Claiming mileage from HMRC

If your employer does not pay you for your business miles or pays less than the approved rate, you can claim Mileage Allowance Relief when you complete your tax return. Self-employed people include their claims in their business accounts.

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How to keep compliant records for your HMRC mileage claim

Keep a detailed mileage log. Include:

• The date and reason for travel
• Start and end postcodes
• Miles travelled
• Whether the trip was business or private

HMRC may ask to see records for up to four previous years.

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Rules for tax

Mileage Allowance Payments

These are the amounts your employer pays you for using your own vehicle for work. Payments at or below the approved rates do not need to be reported. Payments above the rates are taxable.

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Work out the value

Multiply your business miles by the rate for your vehicle. Example: 12,000 miles in a car = 10,000 x 45p + 2,000 x 25p = £5,000.

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Tax: rates per business mile

Cars and vans: 45p up to 10,000 miles, 25p after that.

Motorcycles: 24p.

Bicycles: 20p.

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What to report and pay

Anything above the ‘approved amount’

Report the extra on form P11D and deduct tax through payroll.

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Anything below the ‘approved amount’

No report needed. The employee can claim Mileage Allowance Relief on the difference.

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Vehicles you use for work

Using your own vehicle for work

Keep records and claim the approved mileage rate. You cannot claim separately for fuel or other costs.

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Approved mileage rates

• Cars/vans: 45p then 25p.
• Motorcycles: 24p.
• Bicycles: 20p.

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Using a company car for business

You can claim tax relief on the cost of fuel or electricity used for work journeys in a company vehicle. Keep receipts.

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How to claim

Claim online through HMRC or on your Self Assessment tax return. Send copies of your mileage log when requested. Include separate logs if you have more than one job.

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