Deductible mileage 101 (UK)

If you use your car, van, motorcycle, or bicycle for business purposes, keeping track of your miles can be a great idea! Why, you ask? Well, because when you're driving for work, you can actually get a tax deduction for it.

The folks over at HM Revenue & Customs (HMRC) give you the green light to keep a record of your business trips using whichever method suits you best.

Whether you're into the old-school paper mileage log, a trusty spreadsheet on your computer, or a cool mileage tracking app like MileIQ – it's all good!

Let's talk about Mileage Allowance Relief.

This nifty thing is like a little tax break for folks who use their personal vehicle for business stuff.

Just keep a tab on the miles you cover for work during the tax year, and then multiply it by the rate they've set. 

Take a look at the Business Mileage Rates table below to see the HMRC-approved rates for 2024.

UK HRMC Mileage Rates.png

Just remember, the mileage rate doesn't switch up every year, but the fuel reimbursement rate gets a little tweak annually.

And here's the scoop if your employer is in the picture:

1. If they don't dish out a mileage allowance, you can totally claim the full approved Mileage Allowance Relief amount.
2. If they do cough up an allowance, but it's a bit less than the official amount, no worries! You can still claim Mileage Allowance Relief for the difference.
3. Now, if they're feeling generous and pay you more than the approved amount, just remember – you might need to share a bit of that pie with taxes.

Alright, let's talk about your tax return!

Depending on how much you're looking to claim, there are a couple of ways to go about it:

For claims up to £2,500:

- If you've danced with a Self Assessment tax return before, you can use that to claim.
- If this is your first time in the tax return ballroom, no worries! You can use the form P87 to make your claim.
- If you're more of a phone person and you've waltzed through a successful claim before, you can ring them up for claims up to £1,000 (or £2,500 if it's for pro fees and subscriptions).

For claims over £2,500:

- If you're a self-employed superstar, a director of a company, or you're raking in at least £100,000, it's time to hit the dance floor with a Self-Assessment Tax Return.
- And if your expense claim is over £2,500, no matter what, it's Self-Assessment time.

If you're itching for more info on your tax-saving adventures, HMRC's got your back.

Check out their details on Claim tax relief for your job expenses – it's a good read, we promise.

And hey, remember, taxes don't have to be scary.

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