How much tax relief can I claim back per mile?
The mileage tax relief calculator uses the current approved mileage rates of 45p per mile for the first 10,000 business miles and 25p per mile for every business mile after that.
The rate at which you pay tax can affect the amount you are owed.
For example if you pay tax at 40% and the total figure you are claiming is £2000 you will receive a mileage tax rebate of £800 (which is 40% of £2000).
How far back can I claim for a mileage tax refund?
You can claim mileage tax relief for the last four tax years. You don’t need to be with the same employer to be able to claim.
Am I eligible to claim mileage tax back?
Many people are unaware that claiming mileage tax relief is possible and miss out on what they are entitled to.
However claiming mileage is not allowable for normal commuting to and from one place of work, and you will only be eligible to claim a mileage tax refund if you travel to a temporary workplace.
Can I claim mileage tax relief if my employer pays me an allowance?
Some but not all employers contribute to mileage costs by making mileage allowance payments (MAP).
You can still make a mileage claim if you are paid a mileage allowance by your employer but it depends on how much you are paid per mile and if it is taxed.
Taxed mileage allowance:
A taxed mileage allowance paid by your employer means you can still claim back the full approved mileage rates.
Untaxed mileage allowance:
If you’re paid an untaxed mileage allowance a claim will only be possible on the difference between the approved mileage rates, and what you are paid by your employer. If your employer has paid you the full approved mileage rates and not taxed it, you become ineligible.
Do I need records to claim mileage tax relief?
HMRC expects mileage records to be available which show where you have travelled to with dates and if you are paid a mileage allowance HMRC can ask for information from your employer which shows what you were paid.
If you are completing a P87 to claim your mileage tax relief HMRC asks you to include mileage logs with your P87 if you have not been paid any mileage allowance from your employer.
Examples of people who could be owed a mileage tax rebate:
- Carers and healthcare workers
- Offshore workers who live in and outside the UK
- MOD personnel including the Army, Navy and RAF
- Sales people
- Construction workers
- Estate agents
Many people are eligible to claim mileage tax back. The important thing to remember is that your job title is not relevant to the eligibility criteria.
Clocking up business mileage in your own private vehicle makes a successful claim very likely.
How do I claim my mileage tax back?
How HMRC wants you to claim your mileage tax relief depends on how much you are claiming back and if you already complete a self assessment tax return.
Mileage claims worth over £2500: Making a mileage claim worth £2500 or more for a single tax year should be made by using a self assessment tax return.
If you already complete a tax return for other reasons you should include your mileage claim on the same tax return in the relevant employment section.
Mileage claims worth less than £2500: Claims that do not exceed £2500 in any one tax year should be filed by using a P87 expenses of employment form.
If you are making a mileage claim for more than one tax year at the same time you can include it on the same P87 form.
The P87 can be completed and submitted online or filled in online and posted to HMRC.
Other expenses and your mileage claim:
If you have other allowable work expenses that are not related to mileage you should include them on the same claim form.
Other allowable expenses can include items like tools and for the cost of laundering your work uniform.
It will be easier for both you and HMRC if you can claim for everything you are entitled to at the same time.
Mileage claims and your tax code
After a successful mileage tax relief claim HMRC usually adjusts your tax code if you are continuing to use your car to travel to temporary workplaces.
HMRC typically uses the figures from your previous mileage claim for the basis of your new tax code.
In theory this means that you receive mileage relief during the tax year by paying less tax each time you are paid by your employer.
Checking your tax code if it includes mileage expenses is always recommended because if the allowance HMRC gives in your tax code is not accurate you could underpay tax at the end of the year.
You can ask HMRC to amend your tax code if you feel the tax code you have been given does not accurately reflect your mileage and other work related expenses.
