What is ‘Business Travel’?
Business Travel is the expenses incurred, which can then be deducted under the general tax rules for travel and tourism.
How does it work?
Tax relief is available if you use your own car for business travel, receiving 45p for the first 10,000 miles and 25p per mile after that. The deduction is called ‘Mileage Allowance Relief’ (MAR).
HMRC states that MAR can be flexible as it may be available if the person could have used transport provided by the employer but chose to use their own car. No restrictions apply to MAR, where the employee received no mileage allowance from their employer, despite a claim being available, because they either chose not to claim or because they failed to do so in the time allowed by the employer.
HMRC often request proof of MOT certificates for the tax year that the MAR is being claimed in. HMRC can requested documentary evidence confirming the tax payers travel, as well as details of annual mileage for the tax year. There are various hurdles to overcome when claiming back MAR so keeping a detailed business mileage log is often a good place to start!
How does it affect you?
HMRC have stated that entitlement to MAR requires the employee to use their own vehicle for business travel. MAR can also be applied if the employee uses their spouse’s car. However, company cars are excluded from MAR.
In 2017 there was a case in relation to tax relief for business travel. The tax payer claimed MAR but it was unclear from the evidence provided as to whether they had used their own vehicle, been a passenger in another vehicle, or used a van provided by the employer. An industrial tribunal refused to accept the taxpayer’s accusations, and the claim for MAR failed.
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