The short version: Mileage Allowance lets you claim tax relief when you use your own vehicle for work. Instead of tracking actual fuel and running costs, you claim a set amount per mile.
How much can you claim?
For cars and vans, there’s a rate for your first 10,000 miles in a tax year, then a lower rate after that. Motorcycles and bicycles have their own rates. Check gov.uk for current figures as they can change.
What counts as business mileage?
Journeys between different work locations, visiting clients, travelling to temporary workplaces. Your regular commute from home to your normal workplace doesn’t count, that’s personal travel.
Who can claim?
Anyone who uses their own vehicle for work. Self employed people claim through Self Assessment. Employees can claim if their employer doesn’t reimburse them the full approved amount.
Mileage allowance vs actual costs
If you bought a vehicle specifically for work (like a delivery driver), you might be better off claiming actual costs, depreciation, insurance, fuel, repairs. But once you choose a method for a vehicle, you usually have to stick with it.
Keep a mileage log with dates, destinations, and business purpose. You’ll need it if HMRC asks questions.
Not sure whether mileage allowance or actual costs work better for you? Let us help you figure it out.
