If you’re an employee who uses your car for business journeys and covers the fuel yourself, you might be entitled to claim tax relief—even if your employer gives you a mileage allowance that doesn’t quite cover it.
Let’s break down how this works, whether you’re driving your own car or using a company vehicle, and how to go about making a claim.
Using Your Own Vehicle for Business Travel
If you use your personal car (or even a van, motorbike or bicycle) for work purposes, HMRC lets you claim tax relief using something called approved mileage rates. These rates are designed to cover not just fuel, but also wear and tear, insurance, and maintenance.
Here are the current HMRC-approved rates:
| Type of vehicle | Rate per mile |
| Cars and vans | 45p (first 10,000 miles per tax year) |
| 25p (after 10,000 miles) | |
| Motorcycles | 24p |
| Bicycles | 20p |
You can claim the difference between what your employer pays you and the full HMRC rate.
Example:
Wendy drives 2,100 miles for business in a tax year using her own car. Her employer pays her 30p per mile, but HMRC allows 45p.
- HMRC-approved amount: £945 (2,100 miles × 45p)
- Amount received: £630 (2,100 miles × 30p)
- Wendy can claim tax relief on the £315 shortfall.
Using a Company Car
Things work a bit differently if you’re in a company car. You can still claim tax relief, but only for the fuel or electricity costs you personally cover for business travel—and only where your employer hasn’t reimbursed you.
You won’t be able to use the standard mileage rates here. Instead, you’ll need to keep records of the actual fuel or electricity costs and the business mileage covered.
How to Make a Claim
Making a claim is pretty straightforward, but you’ll need to keep accurate records.
You can claim via:
- HMRC’s online service
- The employment pages of your Self Assessment tax return (if you complete one)
- By post using form P87
Whichever method you choose, HMRC will want proof in the form of a mileage log. This should include:
- The reason for each journey
- The postcode for the starting point
- The postcode for the destination
If you’re claiming for more than one job, you’ll need a separate log for each.
Need Help Navigating Mileage Claims?
Mileage relief can be a valuable tax-saving opportunity, but getting it right means understanding the rules and keeping solid records. If you’re unsure how much you’re entitled to—or you simply want to make sure you’re claiming everything you can—get in touch with us at Jon Davies Accountants. We’re always happy to help you keep more of what you earn.
Contact us today for personalised advice tailored to your situation.
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