Introduction

Navigating mileage claims can significantly enhance tax efficiencies for UK limited company owners using personal vehicles for business purposes. This guide addresses common inquiries, providing insights to optimise this aspect of business expenses.

 

Understanding Mileage Claims

Q: What constitutes a mileage claim?

A: Mileage claims are reimbursements for using a personal vehicle for business-related travel, excluding commutes to your regular workplace. They cover journeys to clients, suppliers, or other business engagements.

 

Claimable Amounts

Q: How much can be claimed for mileage?

A: The HMRC-approved mileage allowance payments (AMAPs) rates are 45p per mile for the first 10,000 business miles and 25p per mile thereafter in the tax year. These rates encompass vehicle costs like fuel, wear and tear, and insurance.

 

Tax Deductibility

Q: Are mileage claims tax-deductible?

A: Yes, claims made at or below HMRC rates are deductible and free from additional tax liability for both the employee or director and the business. Claims above these rates might incur tax.

 

Eligible Travel

Q: What types of travel qualify for mileage claims?

A: You can claim for business meetings, conferences, or travel to temporary workplaces. Regular commutes between home and your permanent workplace are excluded.

 

Record-Keeping Requirements

Q: What records are necessary for mileage claims?

A: Keep detailed logs including the date, journey purpose, start and endpoint, miles travelled, and the claim amount. These are vital for HMRC compliance and reimbursement accuracy.

 

Calculating Mixed-Purpose Trips

Q: How do I handle mileage for mixed-purpose trips?

A: Only the business portion of a journey is claimable. Log miles driven solely for business and claim for these segments only.

 

Temporary Workplace Travel

Q: Can I claim mileage to a temporary workplace?

A: Yes, if the work at a temporary location is expected to last less than 24 months, travel to this site is generally claimable.

 

Using Multiple Vehicles

Q: What if multiple personal vehicles are used?

A: Claims can be made for each vehicle used for business, according to the respective HMRC-approved rates for each vehicle type.

 

Impact on Vehicle Expenses

Q: How does claiming mileage affect claims for vehicle expenses?

A: Claiming at approved rates means not having to calculate actual vehicle expenses for those journeys. However, you cannot claim individual vehicle costs like fuel for the same trips.

 

Company Leased Vehicles

Q: What about mileage claims if my company leases a car for me?

A: For company-leased cars, the business can deduct actual car expenses (lease, fuel, maintenance) instead of using AMAP rates.

 

Conclusion

This guide aims to demystify mileage claims, helping UK limited company owners utilise this tax-saving opportunity efficiently. Adherence to HMRC guidelines and diligent record-keeping underpin successful and compliant claims.
This guide is not intended to provide accounting, tax, legal or business advice. It is provided for information purposes only.

For any further queries, please don’t hesitate to reach out via our Client Services email. We’re here to help!

 

About Neame & Co 

At Neame & Co we specialise in stress free company filing: the easy way to file your year end Company Accounts and Corporate Tax Return to Companies House and HMRC. Maximise tax efficiency, real human support throughout and 100% online and paperless service. Visit Neame & Co for more details on how we can help!