Why do HMRC make tax relief available for mileage?

When individuals find out about the possibilities and eligibility of mileage claims, they often wonder why HMRC makes tax relief available for mileage at all.

The fact is, there are a wide range of perfectly eligible expenses and costs that individuals can claim back via their tax return, but it is up to the tax payer to keep track of these items and specific eligibility. HMRC is very transparent about what can be claimed for tax relief purposes, but there are so many complex tax areas, that not everyone knows about.

When it comes to business mileage, or fuel, you can obtain tax relief going back to 2013. This applies when you have used your own car to carry out business, or you have bought fuel when making use of a company car.

What is ‘business mileage’ exactly?

This refers to the mileage that you accrue during the conduct of business. It doesn’t include your commute – that is the journey from your home to your regular place of work, but it can include travel to any temporary workplaces, as well as business necessary travel to meetings, site visits and other such occasions that are necessary for your role. You will need to check with the HMRC guidance if you are unsure whether a particular journey or journeys are eligible for tax relief.

Getting business mileage tax relief in your own car.

You may be eligible for business mileage tax relief if you use your own car, van or other vehicle for business, and this can include a bike or motorcycle too. You can work out your mileage allowance relief – the amount of tax relief – by adding up the business miles that you travelled in any one tax year since 2013, multiplying this figure by the approved mileage rate, and then adding any mileage payments that you may have received from your employer. You then compare these payments for mileage allowances, against the amount that the government has approved. If this is more than your employer allowed for, you can claim the mileage allowance rate on the difference. This is typical, for example, where an employer has allowed for 30p a mile, and HMRC allows for 45p a mile. This mileage allowance relief lessens the amount of income tax that you need to pay.

Alternatively, you can use the simple calculator available on WorkMileageTaxRebate.co.uk to find out what kind of tax relief you might be eligible for.

Who can get mileage allowance relief?

You may be able to if your employer hasn’t paid you a mileage allowance, or less than the figure that the government has approved – currently 45p a mile.

Remember to keep good records for such claims, including mileage, dates and full details of business journeys. This information will be needed by your employer to pay your mileage expenses, and HMRC always reserve the right to ask to see paperwork. The better your records are kept in, the easier they are to check and evaluate.

To find out more about what’s available under the mileage tax relief, visit our handy FAQ section, which is packed with useful tips and information to help you start your claim.

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

Calculate Tax Rebate