Do you drive for work? If so, whether you use your own car, a company car, motorcycle or bicycle you are entitled to claim mileage. But what constitutes business travel? And how much can you claim? If you’re unsure, read on…
What counts as business mileage?
If you drive your personal car for work, you’re entitled to an Approved Mileage Allowance Payment (AMAP) that covers fuel, wear and tear on your car and depreciation. But, only for business miles, not personal ones; that trip to the shops for dinner doesn’t count, and neither does your everyday commute. However, if you are travelling from home or your place of work to somewhere else for business reasons, such as to see a client or customer or to visit a different office for a meeting, you can claim business miles. Likewise, if you relocate to a new place of work temporarily you may be able to claim mileage, but if you end up spending more than 40% of your time there and the placement lasts over 24 months, it becomes permanent, and thus your journey to work becomes your regular commute and unclaimable.
To break it down, if you go from home (A) to your office (B) and then from there to see a client at their premises (C) and back again, you can claim for journeys B–C and C–B, but not A–B or B–A. Likewise, if you travel from home (A) to an office that is not your regular place of work (D) and the journey is sufficiently different from your usual commute (A–B), you can claim mileage. But, if the offices are close to each other, say within 10 miles, you can’t as it is considered to be the same as your commute.
What do I need to record to claim business mileage?
To claim your mileage, you’ll need a record of all your business trips. You must include the date, number of miles and trip purpose.
Personal cars: how much can I claim for mileage?
How much you can claim depends on your mode of transport and how far you drive. Up to date rates can be found on the HMRC website, but as of 2017 the rates are as follows:
Cars and vans: 45 p per mile for the first 10,000 miles, then 25 p per mile
Motorcycles: 24 p per mile regardless of distance
Bicycles: 20 p per mile regardless of distance
They are not, however, strict amounts; you can actually claim as much or as little as you like – sounds good doesn’t it? But, if you or your employer opt for a higher rate, your mileage becomes a benefit and you’ll have to pay tax on the excess. Conversely, if you receive less than 45 p per mile you may be able to claim tax relief against your earnings, known as Mileage Allowance Relief.
It is also worth noting that if you’re taking other employees with you on your business journey, you can claim an extra 5 p per mile for passengers.
Company cars: how much can I claim for mileage?
When it comes to company cars, the journeys you can claim for are the same – business purposes only. But, the amount you can claim is different and varies depending on the car, its engine size, CO2 emissions and whether it is petrol or diesel. Rates per mile vary between 7 p and 21 p per mile but up to date figures are available on the HMRC website.
If you’re still unsure what mileage you should be claiming, Rebus Bookkeeping can help. Contact us today to find out how and to make sure you are making the most of your business expenses!