To claim business mileage is to do one of two things, and often both. The monthly claim goes to the employer, at whatever rate the employer pays, and is tax free up to HMRC's approved amount for the year. The annual claim goes to HMRC, for mileage allowance relief, when the employer paid less than the approved amount; it is worth the shortfall times the driver's marginal rate. This page walks through both claims for a driver using their own car, what each needs, how the relief is claimed with and without a tax return, and how a company car driver's position differs, with the arithmetic on the mileage worksheets on this site.
The claim to the employer
Submit the miles with a log: date, journey, purpose, miles, usually monthly on the employer's expense form. The employer pays its rate; up to the approved amount for the year that payment is free of tax and National Insurance and is not reported. Keep a running total of the year's business miles, because the approved rate drops from 55p to 25p a mile once the year's total passes 10,000.
The claim to HMRC for the shortfall
At the year end, total the business miles, work the approved amount at the two rates, and subtract everything the employer paid for those miles. The difference is mileage allowance relief. A driver who files self assessment claims it on the employment pages; a driver who does not files a tax relief claim with HMRC, online or on paper, for the year. The tax saved is the relief times the driver's rate.
If the employer paid more than the approved amount
The excess is taxable pay and the employer should have put it through payroll. A driver who receives a flat rate above 55p a mile has no claim to make; the employer reports the excess and the driver pays tax on it through PAYE. Ask the employer for the figure it reported, because it belongs on the driver's return.
A company car driver claims differently
The employer owns the car, so the driver claims fuel only, at the advisory fuel rate for the fuel and engine size or below. There is no mileage allowance relief for a company car driver, because the approved mileage rates apply only to the driver's own vehicle. What the company car driver may need to do is the reverse: repay private miles at the advisory rate to avoid the fuel benefit charge.
Questions people ask about claim business mileage
Can I claim business mileage if my employer pays nothing?
Yes. The whole approved amount is then relief, claimed from HMRC at the year end with your log, and the tax saved is that amount times your marginal rate.
Do I claim the approved rate or my actual costs?
For an employee, the approved rate; there is no claim for actual running costs. The rate is set to stand for them.
Does Carbikly file the claim?
No. Carbikly works the figures and keeps each claim against the driver and the car; the claim to the employer goes on its form and the claim to HMRC through self assessment or the relief claim.