Mileage Claims: Tax relief for business mileage in your own vehicle

Many employees use their own car in the course of their work and it is important to be aware of how you can claim back any tax relief you are due on your expenses. There are different forms of tax relief on different vehicles so you need to be aware of what you are entitled to on your mileage depending on what vehicle you use.

How mileage is defined

It may sound obvious but business mileage is any eligible travel you undertake in a private vehicle for business purposes. Some travel you make to a place you do not normally work may also be considered to be eligible business mileage. It does not, however, mean the normal travel you undertake between your place of residence and where you work on a permanent basis. Any travel you undertake for personal reasons is also excluded.

If you use a private vehicle

There are many jobs that require employees to drive quite regularly during business hours, even if it is local travel. This is certainly the case for community nurses for example or for people who work in construction and must visit several different (non-permanent) sites.

HM Revenue & Customs (HMRC) will have different definitions for a variety of vehicles so it is important to check where you fit in and what you can claim. You may travel around using a bicycle, moped, motorcycle, car or van. Whichever it is you will be entitled to some relief on your tax.

Calculating what your relief will be

There is an HMRC formula for calculating out your so-called mileage allowance relief. A brief outline is below:

To start you need to come up with a figure of the total business miles travelled in a tax year. Then multiply the latest mileage rate by the total miles. Once you come to a total figure you can then compare this with the total amount your employer may have given you to cover any mileage. If the first amount you reach is more than what your employer has given you then you will be due some kind of relief on the difference.

It is important to remember that you are not entitled to tax relief if your employer has not paid you for any expenses or has paid you less than your total expenses. If your employer has paid you more than your total mileage costs then this overpayment will become taxable.

Keeping a good account

To ensure that you make the right mileage claims you should keep a good and up-to-date record of all your travel for work. This will make things smoother when it comes to receiving expenses back from your employer and for making any claims.

Use our free calculator to find out how much income tax you could be entitled to reclaim.

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