Business mileage

You’ll quickly learn that business mileage is a complicated topic if you talk to anyone who either uses their car for work or fills up a company car. You should be aware that if you fit into one of these two groups, you might be eligible to deduct business miles from your taxes.

For the previous 12 years, HMRC has maintained the same business mileage rates, which are currently as follows:

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

It will save you time and effort when submitting a claim if you have a firm grasp on what HMRC considers to be business miles.

The current HMRC definition of business mileage includes all travel related to your job. Extending this to include time spent travelling to a temporary place of employment is possible.

Nonetheless, there are limited circumstances not covered by this definition. Some of these are:

  • Routine commute time between home and a fixed workplace
  • In your personal travels.

Although the above rates represent HMRC’s recommended minimums for business mileage reimbursement, companies are not obligated to utilise them when paying employees and are able to set their own rates.

So when annual tax return is filed, workers can submit a claim for the difference between the company’s mileage rate and HMRC’s rate. If your employer provides a  greater mileage than the HMRC standard, it is subject to tax.

To be eligble for the Mileage Allowance Relief, you must provide proof of the number of miles driven, the dates of travel, and the purpose of the trip.

If your car is electric, you can read more about tax benefits and relevant schemes available here.

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