Skip to main content What is a mileage claim?
Definition of a mileage claim
A mileage claim is one way to get tax relief on a business journey in your own vehicle, whether that’s a car, motorbike or van.
If you travel on business in your own vehicle, you can add up the miles travelled, multiply them by HMRC’s set rate for that kind of vehicle and then include the result as a cost in your business’s accounts. This will reduce the amount of profit your business will pay tax on.
HMRC’s set rates are:
- For a car or van: 45p/mile for the first 10,000 miles you travel on business in the tax year and 25p/mile for subsequent miles
- For a motorbike: 24p/mile
These rates cover the cost of buying, insuring, fueling and maintaining the vehicle so you wouldn’t include any actual vehicle costs in your accounts if you’re making mileage claims, nor can you claim any capital allowances on that vehicle.
Example of a mileage claim:
John is the director of a limited company. He drives 30 miles on business in his own car. This tax year he has already travelled 9,980 business miles so of the 30 miles, 10 will be over the 45p/mile threshold:
9,980 + 30 = 10,010 miles
For the 30 miles, he can claim:
(20 x £0.45) + (10 x £0.25) = £11.50.
Check out our UK tax rates tracker for the current mileage rates in the UK and our mileage calculator to find out how much you could claim in expenses.
Disclaimer: The content included in this glossary is based on our understanding of tax law at the time of publication. It may be subject to change and may not be applicable to your circumstances, so should not be relied upon. You are responsible for complying with tax law and should seek independent advice if you require further information about the content included in this glossary. If you don't have an accountant, take a look at our directory to find a FreeAgent Practice Partner based in your local area.