UPDATED FEB 26, 2021 • 1 MIN READ
HMRC sets and approves mileage rates for each year, and that rate has remained the same since 2011.
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.
These are the current business mileage rates approved by HMRC:
| Vehicle | First 10,000 miles | Over 10,000 miles |
|---|---|---|
| Cars & vans | 45p | 25p |
| Motorcycles | 24p | 24p |
| Bicycles | 20p | 20p |
HMRC has kept the same mileage rates since 2011.
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.
As self-employed, you can claim tax deductions on your business mileage and other business-related travel expenses. 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.
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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.
