What is the Mileage Allowance Relief for Employees?

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What is the Mileage Allowance Relief for Employees?

If you’re an employee and use a personal car for business, you may be entitled to tax relief. Let’s go over the mileage allowance relief for employees and how to claim it.

What is mileage allowance relief?

The HMRC knows there’s a cost to using your personal vehicle for work reasons. That’s why it may let you claim some tax relief for the miles you put on your car. This is true whether you have a car allowance or mileage allowance.

What are the mileage allowance payment rates?

Type of VehicleFirst 10,000 MilesAbove 10,000 Miles
Cars and Vans45p25p
Motorcycles24p24p
Bikes20p20p

How to use these rates for mileage allowance relief

If you use your own vehicle and don’t receive a mileage allowance, track your business miles for the year and then multiply it by the rates above. So, if you drove 9,000 miles, your tax relief would be £4,050.

If your employer pays a mileage allowance less than the rates, claim the Mileage Allowance Relief on the difference. If your company gives you more than the standard rates, you’ll pay a tax on the difference.

You must keep a record of your drives

The HMRC is very clear about this. It states: “You must keep records of the dates and mileage of your work journeys.” An app like MileIQ should help automate this process.

Marin Perez

Marin has been writing about how technology improves lives for about a decade. He's excited to see how entrepreneurs are using tools like MileIQ to be more successful. When not working, he's thinking about his next trip.

MileIQ’s blog does not constitute professional tax advice. You should contact your own tax professional to discuss your situation.

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