If yourself, or and employee, use their private vehicle for journeys that are “wholly and exclusively” for business purposes, then you, or that employee, are entitled to claim back that mileage. You cannot claim for miles spent commuting to the regular work.

What is Business Mileage?

Business mileage is an allowable expense and therefore reduces your company profits, and the amount of tax you pay.

In order to claim your Business Mileage, you will need two forms of evidence which are:

  • A log of the exact date the journey was taken as well as the location

  • The number of business miles covered

How do I calculate Business Mileage?

Mileage expenses are tax-free for the claimant. The expense is calculated as follows:

Business Travel Miles X The Rate Per Mile For Their Vehicle = Vehicle Business Mileage Expense Claim

There are several rates for reimbursable miles, depending on how far the employee or director travels.

Here are the current tax rates per business mile

Type of Vehicle

First 10,000 Miles

Over 10,000 Miles

Cars and Vans

45p

25p

Motorbikes

24p

24p

Bikes

20p

20p

Note: The above rates are not applicable to company owned cars. Please get in touch if you need advice in relation to Company Car mileage.

Here's a quick example:

If your employee travels 16,000 business miles in a year in their personal car,

your approved amount would be £6,000 = (10,000 x 45p + 6,000 x 25p)

Once you have worked this out the figure to reimburse, check our our article here for how to add an out-of-expense if you are a director.

Or click here for an article on raising other expenses, if this is for an employee.

If this did not answer your question, please reach out to our talented team of chartered accountants who are always on hand to offer expert advice as and when you need it.

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