Claiming the Self-Employed Mileage Allowance 2019/2020. Claiming mileage correctly will help reduce your tax bill. Claiming wrongly could result in penalties. Here’s how to get it right.
What is the Self-Employed Mileage Allowance
When you are self-employed and use your personal vehicle for business travel, you are entitled to claim a fuel allowance per mile as an allowable business expense against your taxes.
The fuel allowance per mile that you can claim is set by HMRC.
To help you work out what you are entitled to, HMRC have set out strict rules about:
- What trips you can claim for;
- How much you can claim;
- The records you need to keep to back up your mileage claim.
The HMRC Mileage Allowance Rates for the Self-Employed
You’ll need to use the rates set by HMRC to work out how much you can claim against your taxes.
The self-employed mileage allowance rates for 2019/2020 are:
|First 10,000 Miles||Over 10,000 Miles|
|Cars and vans||45p||25p|
You drive 11,000 business miles in the tax year 2019/2020 in your car.
The total amount of self-employed mileage you can claim against your taxes is calculated as follows:
£4,500 on the first 10,000 miles (10,000 x 45p)
£250 on the remaining 1,000 miles (1,000 x 25p)
You can claim back £45 for the journey (100 miles x 45p per mile)
What Trips Can You Claim For Under the Self-Employed Mileage Allowance
You can claim business mileage against your taxes for journeys that are necessary for work reasons.
That’s times like when you see a client or supplier and if you work from a “temporary workplace“
What is a Temporary Workplace?
A temporary workplace is defined by HMRC as one which you attend that:
- Is for a limited time only, like a one-off meeting;
- Meets the “40% rule” – that means a workplace that you spend less than 40% of your working time at;
- Is for less than 24 months.
So watch out, if you are a freelancer and have a fixed arrangement with a client at their premises you may not be able to claim the mileage.
Can I Claim Mileage to and From Work if I am Self-Employed?
When you are self-employed you cannot claim mileage for commuting to work, unfortunately.
This is what HMRC classifies as “Ordinary Commuting“.
What is Ordinary Commuting
HMRC defines ordinary commuting as being journeys between an employee’s home and their permanent workplace.
Your permanent workplace is the place you attend regularly. That may even be your own house if you work from home.
A regular journey is one that you have to do in order to get to work. That means if you choose to rent an office, you would not be able to claim any type of travel cost getting to it or home again.
Examples of When You Can Claim for Self-Employed Mileage Allowance
You work from home and go to visit a potential new client.
You can claim the self-employed mileage allowance from your home to the client against your taxes.
Let’s say you are self-employed and decide to rent out an office space.
You cannot claim the mileage allowance for travel between your home and office because this would be an ordinary commute to your permanent workplace.
You’ll be able to claim for the self-employed mileage allowance for any one-off journeys outside of your regular commute.
You are a self-employed gardener and store your tools at a local garage. You cannot claim mileage for travelling between your home and garage because this is considered part of your ordinary commute.
How to Calculate Your Self-Employed Mileage Claim for Your Taxes
To work out the amount of mileage you can deduct against your taxes you’ll need to:
- Add up the number of business miles you have travelled;
- Multiply the number of miles in Step 1 by the self-employed mileage allowance rate set by HMRC.
Are Other Car Expenses Tax Deductible?
The self-employed mileage allowance covers the cost of wear and tear on your vehicle as well as fuel, MOT and servicing.
That means other car expenses are not tax deductibles like MOT, repairs and fuel.
The HMRC Mileage Allowance rate per mile is set to include a contribution to these costs.
Self-Assessment and the Self-Employed Mileage Allowance
You need to do two things to claim the self-employed mileage allowance:
- Records and information to support your claim;
- Claiming the total mileage as an expense when you complete your self-assessment tax return.
As with any other business expense, you must keep records to support your self-employed mileage claim.
What Records Should You Keep
Your claim needs to be supported by a record for each trip of:
- Miles travelled
- Reason for the trip (for example customer or supplier name)
Always remember to keep as detailed a record as possible for each of your journeys just in case HMRC ask to look at your records.
How to Track Your Business Mileage
The way you choose to track your business mileage depends on how many miles you travel.
If you only make a few journeys, then you could choose to use a spreadsheet to track your mileage and mileage claim.
I’ve put together a Business Mileage Tracker [2019 Excel Version] that you can use to help get you started.
If you use your personal vehicle on a more regular basis then writing everything down on a spreadsheet can get tricky.
Or worse, you end up forgetting to claim your self-employed mileage allowance on your self-assessment tax return.
Quickbooks Self-Employed has a built-in mileage tracker. It works by tracking all your mileage and then lets you run through what it has recorded so you can mark each journey as business or personal.
Read More: An Overview of Quickbooks Self-Employed
How to Claim for Other Travel Costs
Similar rules apply to other travel costs, like trains, taxis and tube. Journeys outside of your ordinary commute would be tax deductible.
Again you’ll need to make sure you have all the right documentation and receipts to support your claim when you complete your self-assessment tax return.
Can I Claim for Food Against My Taxes
You may be able to claim for certain food when you travel outside of your ordinary commute. But there are restrictions, so you should make sure you follow the rules before you claim anything against your taxes.
Updated 1 July 2019