I’ve updated this post on 13 August 2020
HMRC sets mileage rates that your employees can claim as a business expense per mile for business miles travelled in personal vehicles, whilst remaining free from any additional tax and NI. The mileage allowance doesn’t just cover fuel, it also reflects a fair amount for depreciation, maintenance and insurance.
What is the Standard Mileage Rate for 2019 in the UK?
|First 10,000 Miles||Over 10,000 Miles|
|Cars and vans||45p||25p|
Example of Calculating the Mileage Rate
An employee travels to a clients site on 1 October 2019, driving 100 miles away from their normal place of work using their personal car. The employee would be allowed to claim for business travel of 45p x 100 miles = £45.
They need to submit a mileage claim form with details of when and where they travelled to as well as the person they saw.
Note: Travel from home to work is not an allowable business expense.
Paying More than the HMRC Mileage Rates
If you choose to pay more than the HMRC mileage rates, the additional amount will attract additional tax and national insurance, by way of a P11d benefit in kind.
Paying Less than the HMRC Mileage Allowance 2019
The is no impact on a business if they choose to pay less than the HMRC mileage rates and you don’t need to report anything to HMRC.
But if you are an employee of a business and have received less than the standard HMRC mileage rate, then you may be able to claim for mileage allowance relief meaning you’ll get a tax rebate for any unused allowance. This is known as the Work Mileage Tax Rebate
Alternatively, the business could opt to join a scheme called Mileage Allowance Relief Optional Reporting Scheme (
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