What is Tax Relief on Fuel?

Taxpayers can claim tax relief on the fuel they buy to make some journeys that are part of their job,

The amount of tax relief on fuel you can claim depends on how many miles you are driving for work, and how much you are paid by your employer as a mileage allowance.

With the cost of using your own car for work being so expensive claiming the tax back on your petrol is not something you can afford to miss out on.

Approved mileage rate for fuel

The tax office has approved mileage rate payments which tell you how much tax relief on your petrol or diesel you can claim. The amounts you can claim per mile are:

• .45p per mile for the first 10,000 business miles

And

• .25p per mile for each mile after.

Tax relief on fuel example

A sales rep travels 9,000 miles at 45p per mile = £4,050

Mileage on £4,050 paid at 20% tax relief = £810

In this example you don’t get back the total mileage claim of £4,050 as a tax rebate. You will receive either 20% or 40% of the total, depending on the rate at which you pay tax. If you pay tax at 20% you would receive a mileage tax rebate @ 20% of £4,050, which is £810. If  you were in the higher rate income tax bracket, you would get a mileage tax rebate @ 40% of £4,050, which is £1,620.

Fuel expenses reimbursed by your employer

If you are reimbursed for your petrol or diesel by your employer and the mileage paid to you is not taxed, the amount has to be taken away from the total tax relief on fuel you can claim.

Use the mileage tax relief calculator

The mileage tax relief calculator can help you work out how much tax back on your petrol you could be owed. All you have to do is enter your total work mileage and select your tax bracket, and you will be given an estimation of the mileage tax rebate you could be owed.

Claiming tax back on petrol important facts:

• If you are paid a taxed mileage allowance from your employer the full mileage rates can still be claimed.
• Fuel expenses can be reimbursed for the last four tax years.
• You don’t have to be with the same employer to claim mileage.
• You don’t have to be paid a fuel allowance from your employer to have a valid claim.

How to claim your mileage tax relief

It’s a wise idea to get all your mileage paperwork in order before you make your claim. This means that you’ve got no worries if HMRC asks to see your evidence. You can apply for your mileage claim online using the self assessment system or a P87 form.

There’s an option to send it by post, but only in particular circumstances. HMRC will let you know the timescale for review and processing your claim. And then you’ll get your mileage tax refund.