The current HMRC approved mileage rates vary depending on the type of vehicle used for business purposes.
As seen above, for business travel in cars and vans, the rates for the first 10,000 miles are set at 45 pence per mile, while for motorcycles, the rate is set at 24 pence per mile. For bicycles, the approved mileage rate is set at 20 pence per mile.
However, for business travel that exceeds the initial 10,000 miles, the approved mileage rates for cars and vans decrease to 25 pence per mile. The rates for motorcycles and bicycles remain unchanged.
It is important to note that these rates are specifically applicable to business-related travel and are used to calculate the allowable mileage expenses for tax purposes. If a vehicle is utilised for both business and personal use, only the business miles are accounted for in these calculations.Accurately recording the mileage for each journey undertaken for business purposes is crucial for claiming these expenses, receiving reimbursement, or being eligible for a HMRC deduction.
To be eligible for business mileage allowance, certain criteria must be met. Business trips are a key determinant as they are classified as either "business journeys" or "ordinary commuting journeys." Business journeys, which involve travel to a place other than the employee's permanent workplace, are eligible for mileage allowance. Conversely, ordinary commuting journeys, which refer to travel from an employee's home to their permanent workplace, do not qualify for mileage allowance.
It is important to distinguish between permanent and temporary workplaces in relation to mileage allowance. A permanent workplace is a location where an employee regularly carries out their duties. This could be an office or a site where work is consistently performed and is defined by HMRC as where at least 40% of total working hours are completed. On the other hand, a temporary workplace is a location where an employee visits for a specific task or period but does not have a regular work base.
As mentioned, mileage allowance can be claimed for travel between a temporary workplace and the employee's home, while travel between a permanent workplace and home is not eligible for mileage allowance.
For those who qualify for mileage allowance, a tax relief known as Mileage Allowance Relief (MAR) can be claimed for travel expenses when using a personal vehicle for business purposes. The reimbursement rate follows the HMRC standard rates and is determined by the number of business miles traveled and varies depending on the vehicle type.
By using the mileage allowance calculator we've provided above, you can calculate the total amount claimable for the year from HMRC.
Mileage Allowance Payments (MAPs) are payments made by employers to employees to reimburse them for using their own vehicle for business journeys.
If your employer's reimbursement rate follows the standard HMRC mileage rates, simply use the mileage calculator we've provided above to calculate your MAPs claimable from your employer.
However, please note that if your employer uses mileage allowance rates that differ from those set by HMRC, you will have to calculate your MAPs manually and can not use our provided mileage allowance calculator.
Mileage reimbursement is not mandatory for companies by law. However, many companies choose to offer mileage reimbursement as part of their employee benefits package. The requirements and options for mileage reimbursement can vary between companies.
To be eligible for mileage reimbursement, employees must typically use their personal vehicles for work-related travel. This includes trips to client meetings, business conferences, and other work-related events. However, personal commuting from home to the office is usually not eligible for reimbursement.
When companies choose to reimburse a higher amount than the standard mileage allowance set by HMRC, there may be additional rules and regulations to follow. Companies may require employees to provide detailed trip logs or receipts to justify the higher reimbursement amount. Additionally, companies may have limits on the total amount of mileage reimbursement that an employee can claim per month or year.
Overall, mileage reimbursement is not mandatory for companies, but it is a common practice in many organisations.
