If you are required to use your own vehicle for work, you may be able to claim a Mileage Allowance rebate from HMRC, based on the number of business miles you travel. This guide will cover everything you need to know about claiming Mileage Allowance in the UK, from HMRC’s limit to making a claim.
What Is Business/Work Mileage Allowance in the UK & What Does It Cover?
HM Revenue & Customs (HMRC) grants a ‘business mileage allowance’ to each company vehicle that is in professional use. Essentially, you can reduce the amount of income you are taxed on. There are, however, rules that could affect your eligibility.
The way your business is structured can also have an impact. The mileage allowance covers the cost of fuel, insurance, road tax, and general wear and tear if you use your personal vehicle to make business journeys.
The allowance is the maximum amount that a business or individual can claim per mile. This is also known as the ‘approved mileage allowance payment’ (AMAP) and it works by reducing your taxable pay. As long as the AMAP limit is not exceeded, it will not be subject to taxation.
In order to receive Mileage Allowance Relief, you must claim it – it is never given automatically.
What are the UK HMRC Work Mileage Rates?
Cars and vans that are classed as ‘personal’ (i.e. owned by a member of your fleet staff) can claim back a mileage allowance of 45p for the initial 10,000 miles in a single tax year.
Anything above this threshold can be reclaimed at 25p per mile. This policy is also designed to cover maintenance.
Motorcycle owners can claim back 24p per mile and this remains the same regardless of how far they travel in the financial year.
It doesn’t matter if an employee uses more than one ‘personal’ vehicle in a single year, the tax is calculated using the combined mileage of all of their vehicles.
Who Can Claim Work Mileage Allowance? How Do I Know If I Am Eligible For It?
Mileage Allowance can be claimed by any individual who uses their private or personal vehicle for business purposes. This includes employees, sole traders, self-employed people, and business owners. You can claim Mileage Allowance whether you drive a car, van, motorcycle, or even a bicycle, as long as it’s your own vehicle.
How Can I Work Out My Work Mileage Allowance?
You can use our quick and easy Free Work Mileage Expense Calculator to find out how much you could be owed.
Does the Work Mileage Allowance Change Every Year? What is the Mileage Allowance for Businesses in 2022?
The HMRC business mileage rate for 2022 has been published and it has not changed since the last tax year. This comes as no surprise, as the HMRC mileage allowance rates have stayed the same for the past 12 years.
The mileage allowance rate for the 2022/2023 tax year remains at the following rate:
- 45p for the first 10,000 miles for business-purposes
- 25p for each business mile after the threshold of 10,000 miles.
You can also find the new business mileage rate for 2022 on HMRC’s official website.
Is There A Maximum Time Limit For Claiming The Business Mileage Allowance?
You must claim within 4 years after the end of the tax year. This means you claim relief on all mileage incurred since 6th April 2018, but not anything prior to that.
You can claim even if you are no longer at the same employer.
For What Type Of Jobs Can I Claim Mileage Allowance?
Any employee who uses their own car for work is entitled to Work Mileage Allowance. This includes employees who use their car to travel between different job sites, as well as those who use their vehicle for business purposes only.
Mileage allowance should be agreed upon in an employee’s contract of employment. It doesn’t matter what your job is, if you travel to different places of work, you could be eligible to claim back for Mileage Allowance.
Is It Possible To Write Off Business Mileage?
You can’t claim mileage allowance for personal journeys, they must be made “wholly and exclusively for business purposes”. And neither can you claim mileage allowance for journeys to and from your usual place of work (ie your commercial business premises). You can claim for travel to a temporary workplace, for example, if you’re a plasterer who needs to travel to different sites and jobs.
Does The UK HMRC Offer Better Mileage Allowance Rates For Electric Cars/Vehicles?
The advisory electricity rate for fully electric cars is 5 pence per mile. Hybrid cars are treated as either petrol or diesel cars for advisory fuel rates.
HMRC’s Advisory Fuel Rates For Electric & Hybrid Vehicles will help you get a better understanding of this subject.
Are you looking to Claim Your Tax Back?
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