Business mileage under the simplified expenses rule

Self-employed individuals

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
Motorcycles	24p	24p
Bikes	20p	20p

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?

• Date of the journey
• Reason for the journey
• The start point and destination (postcode to postcode)
• The total miles travelled
• Mileage rate used

Employees

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.