Business mileage and tax relief explained

business mileage

Business mileage and tax relief explained

What is business mileage? How is it worked out and how do we claim tax relief on the miles we travel each year?  These are questions we hear week in, week out from local businesses in and around Stockport.
If you use your own car or van for business purposes you maybe able to claim Mileage Allowance Relief.
For cars and vans the current approved mileage rate by HMRC is 45p per Business mile. This is up to the first 10,000 business miles and then a reduced rate of 25p per mile thereafter.
For these purposes the tax year (and therefore claims period) runs to 5th April each year.
In many cases an employer will make contributions to employees through their expenses policy for business miles completed on the companies behalf.  Often these are made at rates less than those allowed by HMRC. Where this is the case, claims can be made through your self assessment return to uplift the Relief you obtained from your employer to the levels of 45p per mile on the first 10,000 Business miles as noted above.
As ever with HMRC there are strict rules and guidelines around what constitutes business mileage. It is important to keep clear and supportable records of where you went, on which dates and for what purpose. This ensures that relief will be obtained for the business miles completed. If you would like any help with setting up a simple system for minimising the hassle in adhering to HMRC guidelines, please do get in touch and we will be happy to help.
If you have used your own car or van for eligible business travel within recent fiscal years and have been paid less than 45p per mile by your employer you are highly likely to be eligible for a tax refund. There are time constraints for making claims for tax relief and the onus is on the individual to ensure that they obtain the full tax relief to which they are entitled. Needless to say many individuals fail to receive the maximum benefit they are entitled to under HMRC guidelines.
Check out our IN-Formed Guide to Expenses for more on what you can and can’t claim as genuine business expenses.

Let’s start a conversation 

    Subscribe me for updates and news from In Accountancy

    Related articles

    time to pay arrangement
    Limited Companies

    Time to Pay Arrangements: A Lifeline for Owner-Managed Businesses

    Are You Struggling to Meet Your Tax Obligations?

    More than 30,000 UK businesses were involved in some kind of insolvency action in 2023, which was an increase of more than 50% compared with 2021 according to an article in the Guardian earlier this year.

    And the economic outlook would suggest that despite the fact that we are no longer in recession, 2024 and 2025 will be a challenging year for UK small business.

    With this in mind we have prepared the following guide and associated video to help you understand what your options are with regards to agreeing what is known as a ‘Time to Pay’ arrangement with HMRC.

    Read More »

    Find out how we can help?

    Lectus scelerisque a donec tincidunt litora per eleifend eget ut sagittis conubia pharetra scelerisque dui ultricies duis parturient auctor adipiscing.

     

    Let’s start a conversation 

      Subscribe me for updates and news from In Accountancy

      IN-ACCOUNTANCY

      Search