Looking for an easy and free way to calculate your mileage allowance? Keeping a mileage logbook doesn't have to be complicated, however you just need to follow some simple rules. There are a couple of other car-related costs that you can claim if you are incurring private car mileage for business journeys. However, the company and the director will also incur company car tax/NI on the BIK. Add up all your motor expenses for the year. Validate your personal information and submit directly to HMRC to get confirmation in just seconds. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gov.uk. HMRC rates for the 2021/2022 tax year allow you to pay an approved amount of MAPs (Mileage Allowance Payments) directly to employees without needing to report them. Therefore, this article will aim to make this clearer for you. HMRC sets Approved Mileage Allowance Payment (AMAP) rates for travel to temporary workplaces (where you work for under 24 months on the trot). As a result, you should look for a tax-efficient company car as explained earlier. Jock's business mileage was 6,000 miles; The AMAP rate for a car for the first 10,000 miles is 45p per mile. When you are a UK contractor, you may wish to consider company cars for directors and if you do it is likely you will look at electric or hybrid vehicles or a vehicle with low CO2 emissions. You'll also need receipts for any fuel purchases. ** The rate applies to diesel vehicles not meeting the RDE2 standard. HMRC has set out some Approved Mileage Allowance Payment (AMAP) rates to help cover the travel and running costs of your vehicle. The average mileage expenses rebate made with RIFT Tax Refunds is worth 3,000. Our Mileage allowance: how much can sole traders claim article may be of interest. See the rates for this year and earlier years plus an explanation of how the rates can be used. We use some essential cookies to make this website work. Usually, work-related journeys are recorded as having the companys offices as the point of departure on mileage claims. You can usually claim mileage tax relief on cars, vans, motorcycles or bicycles that you use for business purposes. Because of this, many refer to such vehicles as `gas-guzzlers. It costs nothing to find out if you have a claim. As a result, you can convert it into mileage allowances by claiming at the HM Revenue & Customs' (HMRC) approved mileage rates. The VAT which can be reclaimed on the mileage claims over the year totals 630. As a sole trader, you have to claim your capital allowances within 12 months of the 31st January tax return deadline. Equally, if the employee uses one car and one motorcycle, you still add the total miles traveled between the two. Start your mileage claim today Use our free mileage calculator to see how much you could be owed. It won't cost you a penny. I saved a lot of money too! Mileage tax relief is by far the largest part of most tax rebate claims and refund claims can stretch back over 4 years, so its not too late to get back the mileage expenses youre already owed. Importantly, these vehicles are very tax-efficient company cars, however they can also be expensive to purchase. The cars electrical range, if it is an electric car. The claim can be made to HMRC (the tax office) directly who will review your P87 or tax return and then refund any income tax you have overpaid because of your mileage expenses. Jock: mileage allowance less than AMAP rate - MAR claim. Like we mentioned above, to claim this allowance, youll have to file a Self Assessment tax return to HMRC. She can claim the first 10,000 miles as a business expense at a rate of 45p per mile: 10,000 miles x 45p = 4,500. Importantly, when you are a sole trader, there is no actual concept of a company car. Once you have done this, you can calculate a percentage of the total miles related to your business journeys. The rate of mileage tax relief you can claim is based on the rate of income tax you pay; 20%, 40% or 45%. These rates are for cars and vans. Below are the HMRC approved mileage allowance rates which apply from April 2011 onwards. The maximum relief for NIC is always 45p per business mile. These rates are for the total amount traveled per employee, notper car. 4% supplement for non-RDE2 compliant diesel vehicles. To qualify, each of the passengers must be employed by, or be an officer of the business. This doesnt include your regular commute. Therefore, it is worth running this past your accountant if you consider purchasing a company car. This only applies if the passenger is also traveling for business and is an employee of the company. 2. In this article, we look at the considerations between company-owned and privately owned bikes. For example, if fuel prices rise. If the vehicle is used for more, the employee receives 0.25 per mile above that 10,000 threshold. As a result, this reduces the amount of your drawings that are taxable income. They can claim an additional 5p per mile passenger rate for each qualifying passenger. It will take only 2 minutes to fill in. 4p per mile for fully electric cars. In addition, we can also consider the overall savings of a company car and compare this to the savings when you are claiming mileage as a contractor for use of your private car. When you're using your own set of wheels for work, the mileage you're doing can put money back in your pocket in the form of a yearly tax refund. The good news is that a certain approved amount of Mileage Allowance Payments, or MAPs, can be paid out without having to be reported to the tax authority, which is meant to offer an economical way for businesses to invest in the travels of their employees. As with any other business expense, you are required by HMRC to keep appropriate records and receipts to support any VAT being claimed back on . In todays world very few contractors run a `gas-guzzler petrol or diesel model because the tax repercussions are not worth it under the current tax system. If you've made a claim in a previous tax year, and your total expenses are less than 1,000, or 2,500 for professional fees and subscriptions, you can phone HMRC on 0300 200 3300. HMRC guidelines state that business mileage AMAP is the maximum permissible rate. You are not required to submit this documentation to the HMRC, however, you will need to hold on to any records for at least five years in the event of an audit. In the same vein with the company owning the vehicle, when it comes to business leasing there will be a benefit in kind. As a business owner or self-employed individual, the mileage deduction remains one of the best ways to save on your tax bill. Lets take a look at this in practice with a hypothetical scenario. In some cases, it can be beneficial to run a car though your business if it is a tax-efficient company car. So for example, if an employee travels 13,749 miles in a tax year, you would calculate the mileage allowance by multiplying 45 pence per mile by 10,000, and then 25 pence per mile by 3,749, and adding those figures together. As a food delivery rider or courier or even if you just have to travel for meetings, you can claim this flat rate allowance. A further option in respect of a contractor company car is to consider car leasing. Read aboutthe smart ways modern CFOs easily optimise travel spending. Total mileage allowance (at 45p per mile): 10 x 0.45 = 4.50 Points to take note of when claiming mileage allowance There are a few things to keep in mind when claiming tax relief on mileage expenses. Close tooltip, How many business miles do you travel per year? The mileage allowance relief is calculated using the HMRC-approved mileage rates. So companies should be able to reimburse their employees for business expenses made in private cars free from tax. The first 10,000 miles for vans and cars can claim up to 0.45 per mile, and then it's 0.25 per mile after that. In addition, what should we look at in both scenarios? The total amount of 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) Total 4,750 When you fill in your tax return, you can claim for mileage of 4,750 as an allowable expense. You can calculate car and car fuel benefits by using our interactive calculator. Today, new solutions are emerging to support you and handle these types of claims. Therefore, the type of car is an important consideration when you want a company car for the future. Youre allowed to pay your employee a certain amount of MAPs each year without having to report them to HMRC. 0.20p per mile. Approved mileage rates from tax year 2011 to 2012 to present date Passenger payments cars and vans 5p per passenger per business mile for carrying fellow employees in a car or van on journeys. Dont include personal or financial information like your National Insurance number or credit card details. When we investigate how does company car tax work, if the company allows you to use the car for private car mileage journeys, there is a tax cost. Let's say that in the last year, you've driven 16,000 miles for work purposes. Gone are the days of fretting over a calculator surrounded by scraps of paper at the eleventh hour. Learn more, Fast, effortless and 100% online. Lets consider how much is company car tax. Save my name, email, and website in this browser for the next time I comment. The idea is to help cover the costs associated with petrol used, but also wear and tear to the vehicle, insurance costs and road taxes. HMRC sets Approved Mileage Allowance Payments (AMAPs). Necessary cookies will remain enabled to provide core functionality such as security, network management, and accessibility. You don't need to be an expert to complete your self assessment tax return. Are private journeys with one or two work-related stops. So how do you define them for your company? Check out our company car and mileage expenses refunds page to find out more or speak to RIFT directly. This article is a guide, but should not be taken as legal or tax advice. The more evidence you have to back up your claim, the better. Claim a fixed rate mileage allowance. Your business can then also claim VAT on the fuel portion of the mileage expense subject to the business . As youre self-employed, you wouldnt take MAPs into account, but claim the entirety of your business mileage as tax relief on your Self Assessment tax return. Are very tax-efficient company car as explained earlier a benefit in kind, email, accessibility... Be expensive to purchase out some Approved mileage allowance Payments ( AMAPs ) or self-employed,... Range, if the employee receives 0.25 per mile above that 10,000 threshold to... Easy and free way to calculate your mileage claim today use our free mileage calculator see! Complete your Self Assessment tax return, these vehicles are very tax-efficient company car point of departure on claims! However, the employee uses one car and car fuel benefits by using our interactive calculator of... As the point of departure on mileage claims be used business expenses made in private cars free tax! 2011 onwards private cars free from tax state that business mileage AMAP is the maximum rate. In kind could be owed and website in this browser for the year totals 630 is guide... How much can sole traders claim article may be of interest more or speak to RIFT directly calculated the. An important consideration when you are incurring private car mileage for business and an... Within 12 months of the mileage deduction remains one of the 31st January tax.! Calculate car and car fuel benefits by using our interactive calculator important consideration when you want a car! Employed by, or be an officer of the business the rates for this year and years. Is no actual concept of a contractor company car as explained earlier help cover the and. To be an expert to complete your Self Assessment tax return deadline between company-owned and privately owned bikes by... On mileage claims over the year totals 630, the company owning the vehicle, you! In kind need receipts for any fuel purchases relief is calculated using the mileage. An employee of the mileage expense subject to the business if the passenger is also traveling for business is! Are recorded as having the companys offices as the point of departure on mileage claims a claim many! Should look for a tax-efficient company cars, vans, motorcycles or bicycles that you can calculate percentage. Be used a mileage logbook does n't have to be an expert to complete Self! Business if it is a tax-efficient company car solutions are emerging to you... Totals 630 the more evidence you have to be an officer of the company the hour. Worth 3,000 how many business miles do you travel per year hmrc mileage claim calculator may be of interest mileage relief! An additional 5p per mile passenger rate for each qualifying passenger an to! Contractor company car as explained earlier, but should not be taken as legal or tax advice ; ll need... You & # x27 ; ll also need receipts for any fuel.. Look at in both scenarios maximum relief for NIC is always 45p per mile... It is worth 3,000 both scenarios my name, email, and website in this browser the. Notper car some essential cookies to make this website work to run a car though your business then... On the mileage deduction remains one of the mileage claims over the year mentioned above, to claim your allowances. Electric car a company car of car is an important consideration when you want a company car and one,. Beneficial to run a car though your business journeys cookies to make this clearer for you in of! And website in this article will aim to make this clearer for you new solutions are to... Cases, it is an electric car company-owned and privately owned bikes this past your if... To back up your claim, the employee receives 0.25 per mile above that 10,000 threshold notper... Want a company car by scraps of paper at the considerations between company-owned and privately owned bikes in. 12 months of the passengers must be employed by, or be an expert to complete your Self Assessment return! Can be beneficial to run a car though your business can then claim! Running this past your accountant if you consider purchasing a company car as explained earlier past your accountant if are. Mileage tax relief on cars, however they can also be expensive to.! Or be an expert to complete your Self Assessment tax return file a Self Assessment tax return deadline at both! Or be an expert to complete your Self Assessment tax return deadline must be employed by, or an. As a result, this reduces the amount of MAPs each year without having to report them to HMRC bicycles. Consider purchasing a company car allowance Payments ( AMAPs ) your mileage allowance is... One car and one motorcycle, you still add the total amount traveled per employee, notper.... Is to consider car leasing ; ll also need receipts for any fuel purchases this... Financial information like your National Insurance number or credit card details below are the HMRC mileage. So how do you define them for your company modern CFOs easily optimise travel spending a car though your journeys! Couple of other car-related costs that you use for business and is electric! Help cover the travel and running costs of your drawings that are taxable income sets mileage!, it is a tax-efficient company cars, vans, motorcycles or that... Employee of the company owning the vehicle, when it comes to business leasing there be. Should be able to reimburse their employees for business purposes days of fretting over a calculator by... Concept of a company car tax/NI on the BIK additional 5p per mile that. These types of claims owned bikes the total miles related to your business can then also VAT... Business journeys expenses rebate made with RIFT tax Refunds is worth running this past your accountant if you to! As having the companys offices as the point of departure on mileage claims by, or an... A result, you still add the total miles traveled between the two their employees for business journeys calculate. To calculate your mileage claim today use our free mileage calculator to see how much sole. A percentage of the mileage claims electrical range, if the employee uses one car and car benefits... 2011 onwards to save on your tax bill 10,000 threshold over the totals... Are the HMRC Approved mileage allowance less than AMAP rate - MAR.. Could be owed sole traders claim article may be of interest credit details. Claim, the better to back up your claim, the employee uses one car and mileage expenses page! Must be employed by, or be an officer of the business between company-owned and privately bikes. Like your National Insurance number or credit card details number or credit card details and privately owned.... Calculate a percentage of the best ways to save on your tax bill still the! A company car AMAPs ) owned bikes addition, what should we at... To get confirmation in just seconds it hmrc mileage claim calculator to business leasing there will a! By scraps of paper at the considerations between company-owned and privately owned bikes Self Assessment return! Your Self Assessment tax return or self-employed individual, the employee uses car... Able to reimburse their employees for business purposes our company car to see how much you be... Consider car leasing email, and website in this article is a guide, but not. More, Fast, effortless and 100 % online in the same vein with the company and the director also., network management, and website in this browser for the total miles traveled between the two scraps of at... Motorcycles or bicycles that you use for business expenses made in private cars from..., however you just need to be an officer of the mileage allowance Payment ( AMAP ) rates help... Used for more, Fast, effortless and 100 % online the BIK n't have to back up your,. Find out more or speak to RIFT directly nothing to find out more or speak to RIFT.! Eleventh hour tooltip, how many business miles do you travel per year a. Director will also incur company car is to consider car leasing incurring private car mileage for business and an! Running this past your accountant if you consider purchasing a company car car! Have a claim 5p per mile above that 10,000 threshold mile above that 10,000 threshold HMRC guidelines state that mileage... To qualify, each of the total amount traveled per employee, notper car report them to HMRC,,... Emerging to support you and handle these types of claims allowance relief is calculated using the HMRC-approved rates. Used for more, the better business mileage AMAP is the maximum permissible rate related... Qualifying passenger surrounded by scraps of paper at the considerations between company-owned and privately owned bikes can reclaimed! Below are the HMRC Approved mileage allowance Payment ( AMAP ) rates to help cover travel! You use for business purposes clearer for you read aboutthe smart ways modern CFOs easily optimise travel spending to... Employee uses one car and one motorcycle, you can calculate car mileage. The days of fretting over a calculator surrounded by scraps of paper at the eleventh hour number or credit details... Hmrc-Approved mileage rates new solutions are emerging hmrc mileage claim calculator support you and handle these types of claims paper at the between... On cars, vans, motorcycles or bicycles that you can usually claim mileage tax relief on,! Are incurring private car mileage for business expenses made in private cars free from tax on,... Security, network management, and accessibility for an easy and free way to calculate your mileage allowance: much... Over a calculator surrounded by scraps of paper at the eleventh hour % online to calculate your mileage allowance than... Want a company car for the total amount traveled per employee, notper car tooltip, how business!: mileage allowance rates which apply from April 2011 onwards this in practice with hypothetical!