HMRC has confirmed that drivers who cover more than 10,000 miles per year for business purposes are eligible for a 25p per mile tax relief rate. This rule applies to individuals using their own vehicles, including cars, vans, motorcycles, and bicycles, for work-related travel.
Eligibility Conditions
Under HM Revenue and Customs guidelines, tax relief is available for business travel that does not include commuting to and from a permanent workplace, unless it is a temporary place of work. The approved mileage rates cover the costs of owning and running a vehicle, such as fuel, insurance, maintenance, and depreciation.
For the first 10,000 miles, the rate is 45p per mile for cars and vans. Beyond that threshold, the rate drops to 25p per mile. Motorcycles and bicycles have their own fixed rates. To claim, individuals must have paid tax on their earnings in the year of the claim.
How to Claim
Tax relief is based on actual business miles driven and the claimant's tax rate. For example, a basic rate taxpayer can claim 20% of the allowable mileage expenses. Claims can be made through a Self Assessment tax return if required, or via the HMRC website for simpler cases.
The Low Income Tax Reform Group (LITRG) provides additional guidance. If a person holds multiple jobs with unconnected employers, a separate 10,000-mile limit applies to each job. However, if employers are connected, the 10,000-mile limit is shared across all jobs.
Company Car Considerations
For employees using a company car, different tax- and National Insurance-free reimbursement rates apply, depending on the fuel type. HMRC advises checking specific rates for company vehicles.
This update ensures drivers can claim fair relief for significant business mileage, reducing their tax burden while covering vehicle costs.
