HMRC mileage rates 2021
You need to use HMRC mileage rate for 2021 when calculating your mileage reimbursement. HMRC rates have remained the same since 2011 which means that if you are logging earlier trips, you can use the same mileage rate.
The mileage rate is meant to simplify the record-keeping process, ease the administrative burden, and alleviate costs for both businesses and the tax authority. Generally, Mileage Allowance Payments (MAPs) and the simplified vehicle expenses flat rate (for self-employed) are supposed to cover the cost of owning and running your vehicle - including depreciation, insurance, and road tax.
If you use your private vehicle for work, you can be reimbursed by your employer tax-free based on these rates. Alternatively, if your employer opts to give you a lower allowance than the approved mileage rate, you can claim Mileage Allowance Relief (MAR) on the remaining balance.
So, what are the current HMRC mileage rates 2021?
These are the current business mileage rates approved by HMRC for 2021:
|Vehicle||First 10,000 miles||Over 10,000 miles|
|Cars & vans||45p||25p|
HMRC has kept the same mileage rates since 2011. Those are the same HMRC mileage rates you need to use when using a private car, but you can only claim reimbursement for business trips.
What is the 2021 mileage rate for employees?
If, as an employee, you use your private car for business mileage, you can receive an allowance based on the rates from your employer. If you want to know more about Mileage Allowance Payments (MAPs), check our article on mileage allowance.
If your employer reimburses you at a lower rate than HMRC's advisory mileage rate, you can read our guide on how to claim Mileage Allowance Relief.
Automate your mileage logging
Try a mileage tracking app
Can I use the HMRC mileage rate if I’m self-employed?
As self-employed, you can claim tax deductions on your business mileage and other business-related travel expenses by using these HMRC mileage rates. There are two schemes for claiming business mileage - one is based on the above rates set by HMRC (known as the simplified expenses method) and the other based on actual vehicle expenses. You can learn more about the rules that apply to you and how to claim mileage as a self-employed person.
Can I use a different mileage rate than HMRC approved one?
Although HMRC has set the mileage allowance rate, it you are allowed to use a different rate than the standard one for 2021.
If you employer pay back your employees at a lower rate, the employee can apply to HMRC for mileage allowance relief at the end of the tax year to cover the difference. For example, if you pays 34p per mile, you can claim tax relief on the difference of 11p per mile for cars and vans. Similarly, if a business chooses to repay more than HMRC amount, the excess will be taxed. We recommend establishing a system for how you reimburse your employees.
If you need help with your reimbursement system, you can try our Teams solution. If you need help setting up your team, you can contact us for assistance at email@example.com.
What are the approved HMRC mileage rates for 2022?
We don't yet know the mileage rates for 2022 but chances are that the rates will remain the same since they have not changed since 2011. However, make sure to check HMRC official website for the 2022 mileage rates. We will update them on this post as soon as they are available.
Currently, on HMRC's website, you can find information on the mileage rates only up to the end of 2021 and there is no rate set yet for 2022. Stay tuned for more information on the 2022 mileage rate.
FAQ about HMRC mileage rates
1. What is the new mileage rate for 2021?
There is no new rate for 2021, HMRC mileage rates reimains the same - 45p per mile (first 10,000miles), and 25p per mile for every mile driven over the first 10,000.
2. Does my employer have to pay 45p per mile?
Your employer does not have to pay you 45p per mile - they can pay you out another sum they like per mile, but anything over 45p is considered a benefit and must be declared on a P11D and subsequently taxed. Anything less than 45p per mile can be claimed as tax relief on a self-assessment tax return, which you have to fill out on your own.
3. What is the 2022 mileage rate?
HMRC's mileage rate for 2022 is not out yet. It is likely that the rates will remain the same for the UK since they have not changed in over 10 years. Find new information on the 2022 mileage rate here. We will update the new 2022 rate as soon as it becomes available and we will also let you know if the 2022 rate for the UK remains the same as it is now.
This material has been prepared for general informational purposes only and is correct at the time of publishing. It should not be taken as professional advice from Driversnote. We recommend seeking independent legal, taxation, or financial advice from a professional to check how this information relates to your own circumstances.