The HMRC mileage rates
Vehicle Rate for First 10,000 Rate for Mileage
Business Miles Thereafter
CARS 40p 25p
MOTOR CYCLES 24p 24p
BICYCLES 20p 20p
You can see that mileage can also be claimed in respect of business travel by bicycle! Of course in reality this is unlikely to make much difference and means you may turn up to your client hot and sweaty!
If you do 15,000 miles in one year, (tax year) then you can claim:
10,000 x 40p 4,000.00
5,000 x 25p 1,250.00
Making a Total of: 5,250.00
You will have course, have to fund the travel yourself, but the benefit above usually more than makes up for this unless you have an expensive fuel inefficient car.
In order to back up your claim, it is highly recommended that you keep a log of the business miles travelled and the purpose of the travel including client names etc.
This means that if HMRC ever query your submission you have full and proper backup to the claim.
The mileage claimed should also be consistent with the vehicle mileage otherwise you might have to find yourself putting the clock forward on your car!
Generally it is advisable to note down on each business journey made:
· Starting Mileage of the vehicle
· Ending Mileage of the vehicle
· Starting Location
· Ending Location
· Nature of trip
· Client name if one visited
NB - It is not possible to claim mileage for travel to and from your usual place of work even if it is your business. It is, however, possible to claim the mileage for combined personal and business trips if they are to the same destination or part thereof.
What can I do with VAT?
Yes! You can claim VAT back on business mileage expense.
The mileage claim is treated as VAT inclusive, thus if you claim £100.00 in mileage the VAT element claimable is:
£100.00 * 15/115 = £13.04 - (VAT Rate of 15%)
You should always keep all fuel VAT receipts as a back up in case of investigation.
The receipts you keep in respect of VAT claims should pre date the business travel and contain at least the amount of VAT you are reclaiming.
(VAT Rate of 15%)