Can I claim back tax on my mileage if I am not self-employed?
A question that we get asked on almost a daily basis is whether or not you can claim back tax on your mileage if you are not self-employed. The simple answer here is yes you can. The rules are however slightly different for an employee claiming mileage than they are for a self-employed worker. When someone is working self-employed they can claim the majority of their work related mileage, whereas an employed worker can only claim back certain trips. So, we thought it about time to shed a little light on the situation by delving a little deeper into what and what is not claimable for mileage when you are an employed worker.
What is a mileage claim?
A mileage tax refund claim allows you to claim back the cost of travelling whilst on business duties. This could be for visiting different clients, making deliveries, or even working out of a temporary office. Sadly, you can not claim the cost of your daily commute to work, however the majority of business travel outside of this can be claimed.
How much can I claim?
HMRC acknowledge that there are costs incurred that are necessary to performing your job, and travel is one of them. For travel, they allow something known as Mileage allowance relief (MAR). MAR is a sum of monies that you can offset against the tax that you have already paid through your employers payroll, known as Pay As You Earn (PAYE). Depending on the type of vehicle that you are using, there is a set MAR rate. The breakdown by vehicle type is as follows;
Car or Van £0.45 per mile for the first 10,000 miles and £0.25 thereafter.
Motorcycle £0.24 per mile.
Bicycle £0.20 per mile.
Your employer may also be reimbursing you for your business mileage. They are allowed to make something called a Mileage Allowance Payment (MAP), which is a sum of money reimbursable to you for the distance that you have covered on their time. The maximum amount that your employer can reimburse you is £0.45 for the first 10,000 miles, and £0.25 thereafter. If you are receiving less than this as your MAP, then you should be looking to claim the difference between this and the MAR.
What if I have a company car?
For employees that have a company vehicle, you do potentially still have a claim. However the rates are slightly different. The amount of tax relief that you can claim here is called the Advisory Fuel Rate or AFR for short. The amount available is dependant on the size of your vehicles engine, and the type of fuel that it runs on. The rates for these are shown below.
|Engine size||Petrol – per mile||Diesel – per mile||LPG – per mile|
|1400cc or less||£0.12||£0.10||£0.08|
|1401cc to 2000cc||£0.14||£0.11||£0.10|
Hybrid cars are treated as either Petrol or Diesel depending on the alternative, whilst all Electric vehicles have their own AFR of £0.04 per mile.
How do I make a claim?
How you claim depends on the amount that you are looking to claim for. If your claim for mileage relief is £2,500 or less, then you need to complete form P87. If however your claim for mileage relief is over £2,500, then you will need to register for self-assessment and submit a personal tax return.
Submitting a claim for mileage can be daunting, especially considering how complex the UK tax system is. If you are unsure of how to go about it, click the ‘Start my claim’ button below and one of our refund managers will be in touch to discuss how we can help.
Apps to help you track your mileage
If you are still using spreadsheets to track your mileage, then you may want to check out some of these nifty apps that can make life a little easier.
Mile IQ by Microsoft
The Mile IQ app is really neat. It is an automatic mileage tracking app that sits in the background on your smart phone and records your journeys. Although the app is smart, it understandably can not differentiate between what is personal or business travel. This however is quickly solved with a quick swipe left or right to determine which journeys are for which. The app is free to download and use for your first 40 trips per month, or you can upgrade to unlimited trips for only £4.49 per month.
Tripcatcher app is similar to Mile IQ, however the main difference being the cost, and that you have to manually activate the GPS tracking to record your trips. The app doesn’t have a free trial which is a little frustrating, but that being said, it is only £1.49 per month. Having to manually activate the GPS tracking is also a bit of a pain. If like me, you would forget your head if it wasn’t screwed on, then you may find yourself manually adding in your trips which kind of defeats the object of having the app in the first place.
The final app tested was Triplog. Trip log is free to use for a single user and does have the functionality for automatic mileage tracking using your phones GPS. With the app being a freebie then it is definitely worth a download to see if it works for you.