Just like how you can claim tax back for equipment you’ve purchased for your job, you can also claim tax back on your business travel. It isn’t a simple, straightforward process but it’s worth considering if you travel a lot as a part of your job.
How much tax you can get back depends on several factors. If you use your own vehicle or a business one for example it can affect how much you can claim tax relief on. It also depends on whether your employer reimburses you or not, and if they do how much they reimburse you by. Let’s look at how much tax back per mile you can make and examine today’s approved mileage rates.
The Approved Mileage Rates
How much you can claim tax back for per mile depends on the mileage rates, the current mileage rates will last till 2020. They cover three different vehicle categories and you can only claim for each tax year, like regular expenses claims your claims fall into two categories.
Claims up to £2500 and claims over £2500, if it’s up to £2500 you can claim by phone, online or by a self assessment tax return. While claims over £2500 can only be made by using a self assessment tax return.
The current mileage rates for cars and vans are 45 pence for the first 10,000 business miles and 25 pence for the following miles. For motorcycles, it is 24 pence for the first 10,000 business miles and the same for the following miles. And finally, for bikes it is 20 pence for the first 10,000 business miles and any following miles.
Vehicle Differences
If you drive your own vehicle to work and your employer doesn’t pay you any mileage allowance, then you can make a tax claim for the whole amount. To do this you need to add up the number of miles you’ve travelled for business and then simply multiple it by the approved mileage rates.
Remember you can only claim for travels you make for business like business trips for example, not travel to your place of work itself. If your employer pays you a mileage allowance that covers the approved rates, then you can’t make a tax claim.
However, if they do pay you a mileage allowance, that doesn’t cover the approved rates then you can make a tax claim for the difference if the allowance is untaxed (or the full AMAP rates if it is taxed). If your employer pays you more than the approved mileage rates, then you’ll have to pay tax back on the difference.
The same basic rules apply if you’re using a company vehicle, you can claim tax back for business trips and other work related journeys. And again, if your employer only covers so much of the mileage rates, you can claim the difference.
If you use more than one vehicle, then you’ll have some maths to do. If you use vehicles of the same type, two cars for example then you’ll have to combine your business miles before making a claim. If you use vehicles of different types, then you’ll have to submit the claims separately for each vehicle.
