Claim mileage allowance

What is the mileage allowance?

The mileage allowance, also known as the Approved Mileage Allowance Payments (AMAPs), is a rate set by HMRC to reimburse employees who use their personal vehicles for business-related travel. The allowance is intended to cover the costs of fuel, wear and tear, and other related expenses.

How do I know if I need to claim it?

To claim the mileage allowance, it’s important to maintain accurate records of the business miles traveled, including dates, distances, and purposes of trips. This documentation will be necessary if you need to claim tax relief or if HMRC requires verification.

To determine if you need to claim the mileage allowance, follow these steps:

self employed

Review Your Employer’s Reimbursement

  • Compare Rates: Check the mileage rate your employer reimburses you for business travel. Compare it to the HMRC Approved Mileage Allowance Payments (AMAPs) rates:
    • Cars and Vans: 45p per mile for the first 10,000 miles, 25p per mile thereafter.
    • Motorcycles: 24p per mile.
    • Bicycles: 20p per mile.

Calculate the Difference

  • If your employer reimburses you at a rate lower than the AMAP rates, you can claim tax relief on the difference.
  • If your employer reimburses you at a rate equal to or higher than the AMAP rates, you do not need to claim, as you are already fully reimbursed or may need to pay tax on the excess amount.

Keep Accurate Records

  • Maintain detailed records of your business mileage, including:
    • Dates of travel.
    • Total miles traveled.
    • Purpose of each trip.
    • Amount reimbursed by your employer (if any).

Calculate Your Claim

If you are reimbursed at a lower rate, calculate the amount you can claim by subtracting the reimbursed amount from the AMAP rate and multiplying by the total business miles driven.

As of the latest information available, HMRC allows businesses and employees to claim mileage allowances for using their own vehicle for business purposes. The rates you can claim per mile are as follows:

Cars and Vans

  • First 10,000 miles in the tax year: 45p per mile
  • Each additional mile over 10,000 miles: 25p per mile

Motorcycles

  • 24p per mile

Bicycles

  • 20p per mile

These rates are designed to cover the costs of fuel, wear and tear, and other expenses associated with using your personal vehicle for business travel. If your employer reimburses you at a lower rate than the approved mileage allowance payments (AMAPs), you can claim tax relief on the difference. If the reimbursement is higher than the AMAPs, the excess is taxable.

Make a Claim

  • Self-Assessment: If you complete a Self-Assessment tax return, include the mileage claim on your return.
  • P87 Form: If you don’t complete a Self-Assessment tax return, you can use form P87 (Tax relief for expenses of employment) to claim your mileage allowance.

Example Calculation

  • If you drove 8,000 business miles in a year and your employer reimbursed you 30p per mile:
    • AMAP rate: 45p per mile.
    • Employer’s rate: 30p per mile.
    • Difference: 15p per mile.
    • Claimable amount: 8,000 miles × 15p = £1,200.

Check Eligibility

  • Ensure that your travel qualifies as business travel and is not considered commuting between home and your regular place of work.

It is important to keep detailed records of your business mileage to substantiate your claims. Rates and regulations can change, so it is advisable to check the HMRC website or consult a tax professional for the most current information.