How Do I Claim My Mileage Back From HMRC?
You can usually claim mileage tax relief on cars, vans, motorcycles or bicycles that you use for business purposes.
It applies to vehicles you pay for yourself, leased or owned, and company vehicles.
This tax relief isn’t for your daily commute between home and a permanent workplace.That's just 'getting to work'. But it does include any ‘temporary workplace’ you travel to while working.
Figuring out how to claim your mileage back starts with checking your eligibility.
Here’s What We’ll Cover:
What Costs Does Business Mileage Tax Relief Cover?
In business mileage tax relief, HMRC acknowledges your vehicle maintenance costs like:
- Road tax
You don’t apply for all these individual costs separately, but put in a claim for the amount of mileage you’ve done for work.
What Are the Rates of Approved Mileage Allowance Payments?
HMRC sets Approved Mileage Allowance Payments (AMAPs). They give a value to your business journey in pence per mile.
Currently, they are set at:
- Car/Van 45p per mile for the first 10,000 business miles, 25p per mile from 10,000 miles
- Carrying a passenger Additional 5p per mile
- Motorcycle 24p per mile
- Bicycle 20p per mile
The rates don’t change because the price of one element increases or falls. For example, if fuel prices rise. And the engine size and age of your vehicle don’t make any difference either.
What Rate Is the Rate of Mileage Tax Relief?
The rate of mileage tax relief you can claim is based on the rate of income tax you pay; 20%, 40% or 45%.
- 10,000 miles of business travel at 45p per mile = £4500
- Basic rate of income tax paid at 20%
- 20% of £4500 = £900 tax relief
Do I Need Proof of My Work Journeys?
Yes, you need to keep records of all your work travel, for all the vehicles you use. Just a simple diary that notes the dates, number of miles and destination of each journey and any relevant receipts. FreshBooks Expenses Tracker keeps everything in order, as you go. This means that you've got the evidence to prove your claim is legitimate, should HMRC decide to investigate.
What if I Get a Business Mileage Allowance From My Employer?
If you’re employed and your employer pays you some business mileage allowance, you can still claim the rest of it up to the full AMAP amount. This is the same if you drive your own or company vehicle.
- You travel 7,000 miles for work
- You’re given a mileage allowance by your employer of 20p per mile
- The AMAP is 45p per mile
- You can claim the remaining 25p from HMRC
You can use your payslips as evidence of your business travel and the amount you’ve already been paid.
Even if you’re using a company car, you can claim mileage for the electricity and fuel you pay for on business trips. You need to keep records and receipts to support your claim.
What Does ‘Temporary Workplace’ Mean?
This is a crucial definition for determining which of your journeys are eligible for mileage tax relief. Remember, you can only claim mileage on travel to temporary workplaces, but not to permanent workplaces.
Permanent workplace: A building or site where you work for at least 40%. With some jobs, like an area manager’s role, this can also be defined as a particular geographical area.
Temporary workplace: A site or building where you work for less than 24 months.
HMRC has a handy free tool called ‘Check if you can claim work related expenses’, so you can have a quick look, before you invest any time in completing a claim.
How Do I Submit a Mileage Claim?
There are 2 different ways to submit a claim:
If you're an employee and claiming less than £2,500: fill in a P87
Self-employed taxpayers, or employees claiming over £2,500: use the self-assessment system, this means submitting a self-assessment tax return
FreshBooks makes self-assessment easy for you in terms of record keeping and submission, whether you're self employed or an employee.
Good To Know…
- You can backdate a mileage tax rebate claim for 4 tax years
- It doesn’t matter if you’re still working at the same place, you can still claim tax relief
- You can claim for public transport expenses too: bus, train, ferry and taxi fares can all be in your mileage tax rebate claim, just keep those receipts in your FreshBooks app.