HMRC Mileage Log For Taxes: Business Mileage

Posted By ,Posted in Taxes.

HMRC Mileage Log For Taxes: Business Mileage

Updated 30 April 2018

If you drive a personal vehicle for business purposes, the business mileage deduction is a great way to save money on your tax bill. But the HMRC won’t just take your word for it, it needs proof. Here’s what the HMRC will want in your mileage log.

Get Office 365 To Securely Run & Grow Your Business

What Are the Standard Mileage Rates for 2018?

The current HMRC mileage rates, called Approved Mileage Allowance Payments or AMAP are:

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

Get Office 365 To Securely Run & Grow Your Business

What Is The Mileage Rate for 2017 UK?

The HMRC lets you get tax relief for business use of your vehicle. You can find the rates for business miles below:

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

What Are HMRC’s Mileage Log Requirements For Your Business Drives

The HMRC won’t allow you to estimate your mileage. You also aren’t allowed to go back and create your records long after the fact (or if you’re facing an audit). Instead, you should track and record your drives as soon as possible. Ideally, you’d be tracking your business drives every day or every week.

What should your mileage log include? The HMRC says you must keep a record of the:

  • Date of the journey
  • The purpose (business or personal)
  • The start point and destination, and
  • The total miles travelled.

For self-employed workers who use simplified expenses, you only need to track your business mileage. You should also track your total miles including personal miles, just in case. If you’d prefer the actual expenses method, you should be tracking your business and personal trips.

Get Office 365 To Securely Run & Grow Your Business

Why It’s Important To Keep A Mileage Log

The HMRC doesn’t force you to file records of your business miles every year. But, that doesn’t mean you don’t need proof. The HMRC says all taxpayers must “keep such records to enable correct and complete returns to be made.” For self-employed workers, it’s best to keep these records for at least five years.

If the HMRC were to investigate your tax return, it will want to see all your records. If you used your business miles for tax relief, the HMRC will ask for detailed mileage logs to verify your trips.

Without exact, reliable records, the HMRC may disallow your business mileage deduction. This is even if you genuinely used your car for business during the year. It’s pretty simple: No records, no guarantee you’ll get the tax relief you deserve.

How Long Do You Need To Keep A Mileage Log?

The HMRC says you must keep your mileage log (and other tax records) for at least 5 years after the 31 January submission deadline. The tax agency may check your records years down the road to make sure you’re paying the right amount of tax.

Get Office 365 To Securely Run & Grow Your Business

How To Keep Track of Drives For Your Mileage Log

The HMRC permits you to use whichever reliable method you prefer to maintain your mileage log. This includes a paper mileage logbook, a spreadsheet on a computer or using a mileage tracking app like MileIQ.

For many years, a paper mileage log was the only method of maintaining this record. People would keep it in their cars and log their drives manually. This works well if you can remember to log every single drive shortly after you’ve completed it.

And there are some who are great at this but for most of us, this is a major chore. It’s extremely tough to remember to log every business drive every single time. You could be running late or there could just be a very good song playing on the radio as you’re parking.

Along with being difficult to remember, a paper mileage log can easily be lost or damaged. Because the HMRC requires you to keep your records for up to five years, this could be a major pain point if you’re ever facing an audit.

One major positive of a spreadsheet is that it’s very difficult to lose (please back up your computer). But it doesn’t solve the issue of having to remember to log your business drives every single time. In fact, this often requires you to log your miles twice: once in a notebook or on your phone and then another time when you’re in front of your computer.

Get Office 365 To Securely Run & Grow Your Business

Why You Should Consider A Mileage-Tracking App

A mileage tracking app like MileIQ is an ideal solution to track all your business drives. The automatic drive detection means you can track every single business drive, not just the ones you remember to log. Your data is securely stored in the cloud, so you never have to worry about losing your mileage log.

MileIQ can also save you time and money. Instead of wasting time logging your miles or recreating trips, it automatically logs them for you. It also captures every single business drive, not just the ones you remember.

That’s time that you can use to grow your business. Or to play with your kids. Or to watch your favorite footy squad. Let MileIQ handle your miles so you can do whatever you want with your free time.

Get Office 365 To Securely Run & Grow Your Business

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.

Leave a Reply

Your email address will not be published. Required fields are marked *