If you drive your car (or van) for business, claiming your mileage can be an easy way to get a tax break. But it’s not always as easy as you’d expect. HMRC has strict restrictions on the people and journeys that qualify.
It all depends on what type of work you do and where you do it. You may own your own business but still be an employee (which puts you in one category) or be classified as self-employed (another category with another set of rules). In either case the daily commute to and from your permanent place of work probably won’t be included, but lots of other work-related trips might.
If you qualify, HMRC will allow 45p/mile for the first 10,000 miles, then 25p/mile after that. Self-employed people can choose to claim these flat rate expenses which just relate to the number of miles covered rather than any other costs associated with running the car. If you choose to claim capital allowances instead, you can include these other vehicle-related expenses, but your mileage won’t be covered.
If you think you qualify for deductions, you’ll need to keep good, accurate records of the journeys you make. In other words, a travel log. Your log should include dates of trips, starting points, destinations, reasons for travel, starting and ending mileage, and any travel-related costs such as parking and tolls for business trips (although, you can’t deduct fees for parking at your normal workplace). This can be quite a painstaking process if you’re doing it manually.
To save time, use an app like QuickBooks Self-Employed which logs everything automatically for you. There are plenty of mileage tracking apps out there, but QuickBooks Self-Employed automatically integrates your mileage tracking with your other expenses, saving you the hassle of separating your business and personal expenses.
Should you track your mileage?
It’s worth keeping a record of the number of miles you cover for business if you travel:
- between offices at two different work locations
- from home to a temporary job site outside your permanent work location where you expect to work less than one year
- for business-related errands, such as depositing bank slips or buying supplies
- to meet clients
- to the airport for business trips
If you’re self employed and work from home, you can claim deductions for miles traveled to other business locations, such as a second office or a client’s office.
You probably don’t need to track your mileage if you:
- work from home and don’t travel for business
- only travel to and from your permanent workplace
- intend to claim capital allowances for buying or running your vehicle