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27 September 2023 - 2 min read

HMRC Mileage

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“HMRC mileage” is often used to refer to the Mileage Allowance Relief (MAR) that employees, self-employed and business owners can claim for business-related mileage.

Mileage is deducted from HMRC on a pence per mile basis. The authority sets allowance mileage rates each year. The HMRC mileage rate covers all costs of owning and operating your vehicle for the business portion of your driving. These costs include lease payments, road tax, insurance, fuel, maintenance and repairs among others.

If you use your private vehicle for business driving and you are not reimbursed by your employer for these expenses, you can claim mileage allowance relief through the HMRC mileage scheme.

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How to claim HMRC mileage

To claim HMRC mileage, you need to follow the below outlined steps:

  1. Log your business mileage in compliant HMRC records throughout the year.
  2. Multiply your business mileage by the HMRC mileage rate to figure out the allowance relief you are entitled to.
  3. Claim your HMRC mileage on your tax returns.

As an employee you will be able to claim HMRC mileage on the P87 tax form. If you are self-employed you can use Self Assessment to claim tax relief for your accrued business miles.

Keeping compliant HMRC mileage records is of the utmost importance - you need to be able to prove that your mileage allowance relief claim is substantiated.

The current mileage allowance rates are 45p per mile for the first 10,000 miles of your business driving, 25p for each mile over 10,000.

See how to claim HMRC mileage and keep compliant records for your claim in our HMRC mileage guide.

FAQ

You will need to keep detailed records of your eligible business mileage throughout the tax year. Calculate your reimbursement by multiplying your mileage by the HMRC mileage rate. Then, you can claim the sum on your tax return.
The HMRC mileage rate is meant to cover all fixed and variable costs of running your vehicle for business purposes. These include the costs such as license and road tax, depreciation, maintenance, fuel and oil, tyres and more.
As an employer, you are not obliged to provide a 45p per mile allowance to employees. While the rate is set officially by HMRC, it is only a guide for the reimbursement programme in your business. If you reimburse employees at less than 45p per mile (for the first 10 000 miles) they will be able to claim a tax deduction on the difference between the official and the rate they receive from work.

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