A mileage claim is the employee's request to be paid for business miles driven in their own car, and there are two claims hiding in the phrase. The first is the claim to the employer, for whatever rate the employer pays, which is tax free up to HMRC's approved amount. The second is the claim to HMRC, for mileage allowance relief, when the employer paid less than the approved amount or nothing at all. This page sets out how the approved amount is worked from the miles, what counts as a business mile, what the employer can pay without tax, and how the driver claims the shortfall, with the arithmetic worked on the mileage worksheets on this site.
The approved amount is the miles times the rate
Take the business miles in the tax year, apply 55p a mile to the first 10,000 and 25p a mile to the rest, and the result is the approved amount for the year. It covers the whole cost of the car, so the driver claims nothing else for fuel, servicing or insurance. A passenger on business travel attracts a small additional per-mile payment when the employer chooses to pay it; the rate is on the same HMRC page as the car rates.
The claim to the employer
The employer pays its own rate, often the approved rate, sometimes less. Whatever it pays up to the approved amount is free of tax and National Insurance and is not reported. Anything above the approved amount is taxable pay, goes through payroll and attracts National Insurance, which is why few employers pay more. The claim needs a log: date, journey, purpose, miles.
The claim to HMRC for the shortfall
If the employer paid less than the approved amount, the difference is mileage allowance relief and the driver claims it from HMRC, through self assessment if they file a return or through a relief claim if not. The relief reduces taxable income; the tax saved is the shortfall times the driver's marginal rate, not the shortfall itself, which is the figure most drivers expect and do not get.
What is not a business mile
Ordinary commuting between home and a permanent workplace, and any private journey, however necessary. Travel between two workplaces, to a temporary workplace, and to a client are business miles. A journey that starts at home and goes to a client is business mileage only where the client is not a permanent workplace; the rules for tax page on gov.uk sets out the tests.
Questions people ask about mileage claim
Do I need receipts for a mileage claim?
No, for the approved amount: the claim rests on the mileage log, not on fuel receipts, because the rate stands for the whole cost of the car. Keep the log for every journey claimed.
Can I claim mileage if I get a car allowance?
Yes. A car allowance is taxed as pay and does not change the mileage rules; business miles in your own car still attract the approved amount, and a shortfall is still relief.
How far back can I claim mileage allowance relief?
Claims to HMRC can go back several tax years; the current limit is on the tax relief for employees page on gov.uk, and each year is claimed separately with its own log.