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Business mileage under the simplified expenses rule
The mileage rate allowance is designed to cover all running costs such as fuel, insurance, road tax, MOT, servicing and repairs.
It is only available for qualifying journeys, that are wholly and exclusively for business purposes. It is not available for private journeys including travel between home and work.
HMRC’s Approved Mileage Allowance Payments (AMAP’s) are listed below:-
Tax: rates per business mile
|Type of vehicle||First 10,000 miles||Above 10,000 miles|
|Cars and vans||45p||25p|
N.B. You can’t claim simplified expenses for vehicles you’ve already claimed capital allowances for
A detailed record must be maintained to support any claims made. What should your mileage log include?
Employees are also allowed to claim the AMAP’s on qualifying journeys.
If the employer pays below the AMAP rate the employee can claim income tax relief on the shortfall using a P87 form.
You have four years from the end of the tax year to make a claim; so, for 2017/18, you must make a claim by 5 April 2022.
However if the employer pays above the AMAP’s this would need to be reported on a P11D as a Benefit in Kind.