Speak to anyone who uses their vehicle for business reasons, and you will soon realise that business mileage can be a source of confusion.  

If you do use your vehicle for business reasons, you may be able to claim tax relief for business mileage.  

HM Revenue & Customs’ (HMRC) business mileage rates for cars and vans have stayed the same for the past 12 years, and currently stand at:  

  • 45p for the first 10,000 miles 
  • 25p for each business mile above the 10,000-mile threshold. 

What’s more, having a clear understanding of what HMRC defines as business mileage will save you time when you come to claim back what you are entitled to.  

HMRC currently defines business mileage as ‘any travel that you do whilst doing your job’ and can include travel made to a temporary workplace (no more than 24 months).  

There are, however, certain caveats to this definition where relief is not available. These include:  

  • Normal travel between your home and permanent place of work  
  • Any travelling that you conduct privately. 

Even though the business mileage rates outlined above are HMRC’s standard, it is not mandatory for employers to use these rates when paying business mileage. Instead, employers could choose to set their own rates.  

There is a provision for employees to claim the difference at the end of each tax year where a company mileage rate is lower than HMRC’s.  

However, if your employer pays a higher rate of mileage than the HMRC standard, this will be subject to tax.   

You must keep accurate records of all the mileage, dates, and details of your business travel, as you will need this information if you want to claim Mileage Allowance Relief. 

How can George Hay help? 

Our team of chartered accountants and business advisers can assist you to ensure that you are keeping accurate records and advise you on allowable expense claims. 

If you would like to discuss this, or any other company car or employee benefit related tax issues, contact us today. 

Share to