What counts as business mileage?

If you use your own vehicle for business reasons, or if you purchase fuel for a company car, then you may be entitled to claim tax relief for these expenses. It is very important to know exactly what is deemed to be business mileage by HM Revenue & Customs (HMRC) so you can claim back exactly what you are entitled to. You can actually make claims retrospectively going back a few years, depending on whether you have previously submitted a self-assessment tax return form or not.

Definition of Business Mileage

Put simply, business mileage is any mileage that you do whilst doing your job. Sometimes it can include the travel you make to a temporary workplace. However, it does not cover the normal travel  hat you make between your home and your permanent place of work. It also does not cover any private travelling that you do.

Business Mileage and Your Own Vehicle

If, for instance, you are a nurse and you need to travel around the community, then you might be able to claim for business mileage as long as you are using your own car for this. Construction workers may also be able to claim business mileage if they use their own vehicles to travel between building sites and places of trade. It doesn’t matter what type of vehicle you use. Whether it is a bicycle, moped, motorcycle, car or van, you are usually entitled to get business mileage tax relief if the vehicle is your own.

Mileage Allowance Relief

HMRC have a formula for working out the amount of tax relief – Mileage Allowance Relief – which you can get. In basic terms it is as follows: First work out the total number of miles travelled on business in the given tax year. Then multiply the current approved mileage rate by the business miles to reach the approved amount. Then add up the mileage payments you have been given by your employer. You should then compare the approved amount with the mileage payments you have been given. If the approved amount is more, then you will be entitled to a Mileage Amount Relief on the difference between the two.

It is important to remember that you cannot get Mileage Allowance Relief unless your employer has paid you a mileage allowance. If your employer actually provides you with more than the approved figure, then you will be liable to pay tax on the additional money.

Keeping Records

To ensure that you make the right claims for business mileage you need to keep a record of all the mileage and dates and details of your business travel. Not only does your employer need these details to reimburse you for expenses, but you will also require them if you are to claim any Mileage Allowance Relief.

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

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