Who and how much can be claimed as business mileage as per the HMRC regulations?
You are being a sole trader or the director of your own company will surely spend regular mileage on your business for day today activities. In calculating your tax payable can you deduct these expenses regarding the business mileage? How much you can deduct ? . Let’s discover answers for those and let’s see how BVS can help you with this.
What is business mileage and who can claim?
You as the owner of your business would regularly spend on travelling for business purposes such as meeting with a client. Expenses related to these activities are called business mileage. This will be considered as a deductible expense when arising the tax payable by you or your business.
NOTE : business mileage should exclusively include journeys related to business purposes. Commuting or personal trips will not be considered as business mileage.
Both Limited companies and Sole traders are allowed to claim the business mileage. Not only that any employee who incur business mileage is eligible to claim that from the company. If company is not paying or paying below the HMRC stated rates employee can claim the difference from HMRC.
What we require as proof for mileage and HMRC approved rates
It is very simple in terms of documents what we have to submit for claiming. All you have to do is maintaining a log for recording business mileage including the date, location and the number of business miles covered.
HMRC mileage rates are as follows;
| Transport mode | Up to 100,000 miles | After 100,000 miles |
| Car/Van | £ 0.45 | £ 0.25 |
| Motorcycles | £ 0.24 | £0.24 |
| **Bikes | £ 0.20 | £ 0.20 |
** Sole traders are not eligible to claim for bikes, Only Limited companies has the eligibility
HMRC advisory fuel rates
When company car is used for business purposes HMRC advisory fuel rates has to be used for reclaiming the fuel component of the business mileage.
| Engine capacity | **Electric | Petrol | Diesel | LPG |
| Up to 1400 CC | 5p | 13p | 8p | |
| Up to 1600 CC | 5p | 11p | ||
| 1401-2000 CC | 5p | 15p | 10p | |
| 1601-2000 CC | 5p | 13p | ||
| Over 2000 CC | 5p | 22p | 16p | 15p |
** Fully electric cars are considered here. Hybrid type cars are claimed at petrol or diesel rates
FAQ
- My business is just a start-up, I haven’t earned much cash from my business yet. How can I claim business mileage?
- You need to wait until your business generates cash flows, then you can claim. Or if you are a sole trader infuse more cash in terms of capital or if your business is a Limited Company infuse more cash in terms of a loan from a director then you can claim.
BVS Advice
- Maintain proper records of your business mileage (you may use a mobile application which is freely available)
- Claim only genuine business-related mileage
- Use appropriate rates
- Consult an accountant to get things right from outset
