Index of the Article:
The Audio Summary of the Key Points of the Article: What Is Classed as Business Mileage by HMRC?
What Is Classed as Business Mileage HMRC in the UK?
When it comes to tax deductions and mileage claims in the UK, business mileage refers to any travel undertaken "wholly and exclusively" for work purposes. According to HMRC, this includes trips that are necessary for business operations, but excludes personal travel or ordinary commuting between home and a permanent workplace. Understanding what qualifies as business mileage is crucial for UK taxpayers, especially self-employed individuals and employees who use their personal vehicles for work-related journeys.
In this three-part guide, we will comprehensively break down the rules surrounding business mileage as per HMRC guidelines, including updated allowances and key considerations for 2025.
Business Mileage – The Essential Rules and HMRC Guidelines
To get the most out of your business mileage claims, it is important to understand the official HMRC criteria. Not every trip qualifies, and making incorrect claims could lead to penalties or rejected deductions.
1.1 What Qualifies as Business Mileage?
HMRC classifies business mileage as any travel required for work purposes, excluding private use and commuting. Here are some examples of what qualifies:
✅ Travel Between Work Locations
If you need to travel from one workplace to another in the course of your job, this counts as business mileage.
Example: A consultant who visits different client sites throughout the day.
✅ Travel to a Temporary Workplace
A “temporary workplace” is a location you attend for work for less than 24 months or not regularly enough to be considered permanent.
Example: A project manager working at a client’s office for six months.
✅ Journeys for Business Meetings or Client Visits
If your job requires you to visit clients, suppliers, or attend business events, this is classed as business mileage.
Example: A sales executive travelling to multiple customer sites in one day.
✅ Driving for Work Duties
If your job requires frequent travel, such as deliveries, inspections, or surveys, this qualifies.
Example: An engineer travelling to different sites for repairs.
1.2 What Doesn’t Count as Business Mileage?
While business mileage covers many types of journeys, certain travel does not qualify, even if it feels work-related.
❌ Commuting to and from a Regular Workplace
Your daily drive to the office does not count, even if you carry work-related materials.
Example: A lawyer driving from home to their firm's office each morning.
❌ Personal Detours During Business Travel
If you combine a business trip with personal errands, only the work-related portion is deductible.
Example: Driving to a client’s site but stopping for personal shopping on the way.
❌ Travel Between Home and a Permanent Workplace
Even if you work in multiple locations, regular commutes don’t qualify.
Example: A doctor with shifts at two hospitals cannot claim the commute to either.
1.3 HMRC Mileage Rates for 2025
The UK government allows businesses and self-employed individuals to claim mileage at set rates. These are called Approved Mileage Allowance Payments (AMAPs).
Vehicle Type | First 10,000 miles per year | Miles over 10,000 per year |
Cars & Vans | 45p per mile | 25p per mile |
Motorcycles | 24p per mile | 24p per mile |
Bicycles | 20p per mile | 20p per mile |
💡 Important Notes on Mileage Rates:
These rates apply to employees using their own vehicles for work.
If your employer reimburses less than these rates, you can claim the difference as tax relief.
If you receive more than these rates, the excess is taxable as income.
1.4 The Difference Between Employees and the Self-Employed
The way mileage is claimed depends on your employment status.
For Employees:
Mileage allowance is usually paid by your employer under AMAP rules.
If your employer pays less than the AMAP rate, you can claim tax relief for the difference.
Example: Your employer pays 35p per mile instead of 45p. You can claim tax relief on the missing 10p per mile.
For Self-Employed Individuals:
You can choose between two methods:
1. The Simplified Expenses Method (using mileage rates)
2. The Actual Costs Method (calculating fuel, insurance, and maintenance costs)
You cannot switch methods mid-tax year once chosen.
1.5 Common Mistakes That Could Cost You Money
Many taxpayers make errors when claiming mileage relief, leading to rejected claims or financial loss. Here are some pitfalls to avoid:
🚫 Mistaking Commuting for Business Mileage – Daily drives to work aren’t deductible.
🚫 Forgetting to Keep a Mileage Log – HMRC requires detailed records of each journey, including dates, distances, and purposes.
🚫 Claiming Private Travel as Business Mileage – HMRC can request proof that a journey was for business.
🚫 Not Claiming Mileage Relief When Underpaid – If your employer reimburses less than HMRC’s rates, you must claim tax relief to avoid missing out.
🚫 Switching Between Claim Methods – If you're self-employed, you must stick to either AMAP or actual costs for the entire tax year.
How to Track and Claim Business Mileage Correctly
Now, we will go deeper into how to track business mileage properly and how to claim mileage relief, ensuring you don’t miss out on tax savings.
Many UK taxpayers, whether self-employed or employees, struggle with proper mileage tracking. HMRC requires accurate records of all business journeys—meaning that keeping detailed logs is not optional if you want to claim mileage relief.
2.1 The Importance of Keeping a Mileage Log
One of the most common mistakes people make is not keeping a proper mileage record. Without it, HMRC may reject your claim if you are audited.
According to HMRC guidelines, your mileage log should include:
📌 Date of the journey
📌 Start and end locations (including postcodes)
📌 Total miles travelled
📌 Purpose of the trip (e.g., client meeting, delivery, site visit)
📌 Vehicle type used
💡 Example of a Good Mileage Log Entry:
Date | Start Location | End Location | Miles | Purpose |
05/02/2025 | London (NW1 2DB) | Manchester (M1 1AE) | 190 | Client meeting |
07/02/2025 | Manchester (M1 1AE) | Liverpool (L1 8JQ) | 34 | Site visit |
❗ HMRC does NOT accept vague logs. Saying “Approx. 300 miles this month” will not be accepted.
2.2 How to Track Mileage – Digital vs Manual Methods
You can track mileage manually or use digital tools to make the process easier.
Option 1: Manual Tracking (Pen & Paper or Spreadsheet)
Pros:
✔ Free to use
✔ Simple for low-mileage claimants
Cons:
❌ Easy to forget or lose records
❌ Requires effort to maintain
💡 Best for: Occasional business drivers, freelancers, or those making only a few claims per year.
Option 2: Using a Mileage Tracking App
Mileage tracking apps automatically record your journeys using GPS. Some also integrate with HMRC for easy reporting.
Popular mileage apps in the UK:
📌 MileIQ – Auto-tracks trips and classifies them as business or personal
📌 TripLog – Includes expense tracking and HMRC-compatible reports
📌 Driversnote – Custom reports for mileage claims
📌 QuickBooks Self-Employed – Tracks mileage and syncs with accounts
Pros:
✔ Automatically records trips
✔ Reduces human error
✔ Helps prevent HMRC disputes
Cons:
❌ Some apps require a paid subscription
❌ GPS tracking can drain battery life
💡 Best for: Frequent business drivers, self-employed individuals, and employees who claim mileage often.
2.3 How to Claim Business Mileage as an Employee
If your employer reimburses mileage at less than the HMRC approved rates, you can claim tax relief on the difference through Mileage Allowance Relief (MAR).
Step-by-Step Guide to Claiming Mileage Allowance Relief (MAR)
1️⃣ Calculate your total business miles driven
Example: You drove 5,000 business miles this year.
2️⃣ Check how much your employer reimbursed you
If they paid 35p per mile, but HMRC allows 45p, you can claim the missing 10p per mile.
3️⃣ Multiply the missing amount by your total miles
5,000 miles × 10p = £500 claimable relief
4️⃣ Claim your relief through HMRCYou can claim via:
Your Self-Assessment tax return (if you already file one)
Using the HMRC P87 form (for employees who don’t file Self-Assessment)
💡 Where to claim: GOV.UK Mileage Allowance Relief
2.4 How to Claim Business Mileage as a Self-Employed Person
Self-employed individuals do not use MAR but instead deduct mileage as a business expense on their Self-Assessment tax return.
Two Methods for Self-Employed Mileage Claims
1️⃣ Using HMRC’s Standard Mileage Rates (Recommended for simplicity)
You apply the 45p (first 10,000 miles) and 25p (above 10,000 miles) rates.
Example: If you drive 12,000 miles, you claim:
10,000 miles × 45p = £4,500
2,000 miles × 25p = £500
Total deduction = £5,000
2️⃣ Using the Actual Cost Method (Recommended for high mileage drivers)
You claim a proportion of actual fuel, insurance, maintenance, and depreciation costs.
You must keep all receipts and log how much of your driving is for business vs personal use.
Example: If 70% of your vehicle’s use is for business, you can claim 70% of your total vehicle expenses.
💡 Important: Once you choose a method, you cannot switch mid-year.
2.5 Special Cases: Pool Cars, Company Cars & Passenger Payments
Not all business mileage falls under standard HMRC mileage relief.
A. Pool Cars (Shared company vehicles)
🚗 If you use a company-provided pool car, you cannot claim business mileage relief.
B. Company Cars (Assigned to specific employees)
🚗 If you have a company car, your employer may:
Pay for all fuel – No mileage claims allowed.
Reimburse mileage – HMRC-approved rates apply.
C. Passenger Payments (For Employees Carpooling for Work)
🚗 If you drive colleagues for work-related travel, HMRC allows you to claim an extra 5p per mile per passenger.
Miles Driven | Standard Rate (Car) | With One Passenger | With Two Passengers |
100 miles | £45 | £50 | £55 |
200 miles | £90 | £100 | £110 |
💡 Tip: Many employees forget to claim passenger payments, missing out on extra tax relief.
Maximising Your Business Mileage Claims and Avoiding HMRC Pitfalls
Now we will focus on how to optimise mileage claims, avoid common mistakes that trigger HMRC scrutiny, and understand what happens in the case of an audit.
Properly managing business mileage claims can help reduce your tax bill, but it is essential to follow HMRC guidelines to prevent overclaiming, which could lead to penalties.
3.1 How to Maximise Your Business Mileage Tax Relief
Many UK taxpayers fail to claim the full mileage relief they are entitled to. Here are some strategies to ensure you do not miss out on potential savings.
A. Claim Every Eligible Business Mile
Some taxpayers underestimate the miles they travel for work. Over time, small amounts add up, and failing to track all eligible miles could mean losing out on significant tax relief.
Example:
If you drive 20 miles per day for business purposes for 200 days a year, that totals 4,000 miles.
At 45p per mile, this equals £1,800 in tax-deductible expenses.
B. Combine Business Trips to Increase Efficiency
Planning routes to cover multiple business-related stops in one journey can help increase the proportion of claimable miles while reducing personal mileage.
Example:
Instead of making a separate trip to visit a supplier, incorporate it into an existing client visit.
C. Take Advantage of Passenger Payments
As mentioned above, if you carry work colleagues for business travel, you can claim an additional 5p per mile per passenger. Many employees forget to claim this, missing out on extra relief.
Example:
If you drive 10,000 miles with a colleague for work, you can claim an extra £500 in passenger payments.
D. Ensure You Are Using the Best Claim Method
For self-employed individuals, deciding between the simplified mileage method and the actual expenses method is crucial.
The mileage rate method is easier to track and works well for those who drive fewer miles.
The actual expenses method is often better for those with high vehicle costs, such as those using larger commercial vehicles or travelling extensively for work.
3.2 Avoiding Common HMRC Red Flags
HMRC is strict about mileage claims and frequently conducts checks to identify incorrect claims. Here are some mistakes that could trigger an investigation.
A. Overestimating or Inflating Mileage
Some taxpayers round up their mileage figures, which can raise red flags during an audit. Mileage should always be based on actual distances travelled.
Example:
If you consistently report 100 miles per trip when actual distances are closer to 85 miles, HMRC may request evidence.
B. Failing to Provide a Mileage Log
HMRC requires detailed records of business mileage. If you cannot provide evidence when requested, your claim could be denied, and you may face penalties.
Example:
A self-employed consultant claims mileage relief for 15,000 miles but does not keep records. If audited, HMRC may reject the claim.
C. Claiming Non-Business Travel as Business Mileage
Only travel that is wholly and exclusively for business is claimable. Personal trips cannot be included, even if they occur during the same journey.
Example:
Driving to a client meeting but making a detour to visit family does not allow you to claim the entire trip as business mileage.
D. Switching Between Claim Methods Mid-Year
Once a self-employed person chooses either the mileage rate method or the actual expenses method, they must use that method for the entire tax year.
Example:
Claiming mileage rates for six months and then switching to actual vehicle expenses for the remaining months is not permitted.
3.3 What Happens If HMRC Audits Your Mileage Claims?
HMRC can investigate tax returns at random or if there is reason to suspect an incorrect claim. Here is what happens if your mileage claims are audited.
A. HMRC May Request Supporting Documents
If HMRC questions your claim, they may ask for a mileage log, fuel receipts, and details about work-related travel.
Example:
An individual claims mileage for 8,000 miles but cannot provide logs. HMRC may reduce or deny the claim.
B. Adjustments and Penalties
If HMRC finds errors in your claim, they may adjust your taxable income and issue penalties if they believe the mistake was intentional.
Minor errors (accidental miscalculations) usually result in a correction.
Negligent errors (such as exaggerated claims) can lead to penalties of up to 30 percent of the overstated amount.
Deliberate fraud (such as claiming fictitious trips) can result in penalties of 100 percent of the overstated amount, and in severe cases, legal action.
C. How to Defend Your Claim
To protect yourself in case of an audit:
Keep a detailed mileage log for at least five years.
Store any supporting documents, such as meeting confirmations or client invoices, to verify business travel.
Be consistent with your mileage claims each year.
3.4 Future Changes to HMRC Mileage Rules
Tax rules are subject to periodic reviews by HMRC, and it is important to stay updated on any changes that could impact mileage claims.
As of January 2025, there are no announced increases to Approved Mileage Allowance Payments (AMAPs), but adjustments could be introduced in future budgets. Key areas to watch:
Possible increases in mileage rates to reflect rising fuel costs
Changes in tax relief policies for electric and hybrid vehicles
Stricter reporting requirements for self-employed mileage claims
It is advisable to check HMRC guidance regularly for updates to mileage allowances and reporting rules.
By following these guidelines, UK taxpayers can ensure they claim the correct mileage relief, avoid penalties, and reduce their taxable income legally.
For the latest official updates on business mileage rules, visit GOV.UK.
Summary of the Key Points of the Article:
Business mileage refers to travel undertaken wholly and exclusively for work purposes, excluding personal journeys and commuting to a regular workplace.
Qualifying business mileage includes travel between work locations, trips to temporary workplaces, and journeys for client meetings or work-related duties.
HMRC mileage rates for 2025 remain at 45p per mile for the first 10,000 miles and 25p per mile thereafter for cars and vans, with lower rates for motorcycles and bicycles.
Employees can claim Mileage Allowance Relief (MAR) if their employer reimburses them at a lower rate than HMRC’s approved mileage rates.
Self-employed individuals can choose between claiming mileage using the simplified mileage rate method or deducting actual vehicle expenses.
A detailed mileage log is mandatory for all mileage claims, including date, journey details, miles travelled, and the purpose of each trip.
Digital mileage tracking apps can help automate record-keeping, reducing errors and ensuring compliance with HMRC rules.
Common mistakes to avoid include overestimating mileage, failing to keep records, claiming non-business trips, and switching claim methods mid-year.
HMRC may audit mileage claims and request evidence such as logs and receipts, with penalties imposed for incorrect or fraudulent claims.
Future HMRC changes may impact mileage relief, including potential adjustments to rates, stricter reporting for self-employed individuals, and evolving rules for electric vehicles.
FAQs
Q1: Can you claim business mileage if you use a rental car for work purposes?
Yes, you can claim business mileage for a rental car if you are using it exclusively for work-related travel and your employer does not reimburse you separately for the fuel costs. However, if your employer pays for the rental and fuel, you cannot claim mileage relief.
Q2: Does business mileage include travel between two jobs if you have multiple employments?
Yes, if you have two separate employments and travel directly between them, this can qualify as business mileage. However, commuting from home to either job does not qualify.
Q3: Can you claim business mileage for travelling to a training course?
It depends on whether the training is required for your job. If the training is necessary and approved by your employer or business, then the travel can be classed as business mileage. However, if it is voluntary professional development, it does not qualify.
Q4: How does HMRC treat business mileage for subcontractors in the construction industry?
Subcontractors under the Construction Industry Scheme (CIS) can claim mileage relief for travel to temporary worksites but not for regular commutes to a long-term contract site.
Q5: Can you claim business mileage if you use a leased car for work?
Yes, you can claim business mileage if you are personally responsible for the lease payments and fuel costs. However, if the vehicle is provided through your employer, different rules may apply depending on the terms of your employment contract.
Q6: Do electric vehicles qualify for the same HMRC mileage rates as petrol and diesel cars?
Currently, HMRC applies the same mileage rates for electric vehicles as petrol and diesel cars under the Approved Mileage Allowance Payments (AMAPs) scheme. However, employers may reimburse electric vehicle users at different rates.
Q7: Can you claim business mileage for driving to an airport for a work trip?
Yes, if you are travelling to an airport for a business-related trip, you can claim mileage relief for the journey. However, personal travel to an airport for a holiday does not qualify.
Q8: How do you calculate mileage if you mix personal and business trips in one journey?
You must separate the business portion from the personal portion of the journey and claim only the work-related miles. A clear log should be kept to ensure accuracy.
Q9: Can you claim mileage if you carpool with colleagues to a business location?
You can claim mileage if you are the driver, but passengers cannot claim unless they contribute fuel costs and have a separate reimbursement agreement. Employers may pay an additional 5p per mile per passenger.
Q10: Does mileage to a second home office or co-working space count as business mileage?
No, if you regularly work from a second home office or co-working space, HMRC may treat it as a permanent workplace, making travel to and from it non-qualifying for business mileage claims.
Q11: How do you claim business mileage for an overseas business trip?
If you rent a vehicle abroad for business travel, you may claim mileage based on actual fuel receipts and local reimbursement rates, but the UK’s AMAP rates do not automatically apply.
Q12: Can you claim business mileage if you are a company director?
Yes, company directors can claim business mileage for travel undertaken wholly for business purposes, but they must ensure proper records are maintained, especially if they use a company vehicle.
Q13: How far back can you claim for unclaimed business mileage?
Employees can claim for mileage allowance relief up to four years from the end of the tax year in which the expense was incurred. Self-employed individuals can only claim for mileage within the relevant accounting period.
Q14: What happens if you claim too much mileage and HMRC audits you?
If HMRC finds that you have overclaimed mileage, they may adjust your tax liability and impose penalties if they determine that the overclaim was deliberate or negligent.
Q15: Do mileage rates apply to taxi drivers and couriers?
Self-employed taxi drivers and couriers can use either the mileage rate method or the actual expenses method, but they cannot switch methods within the same tax year.
Q16: Can an employer set a different mileage reimbursement rate than HMRC’s standard rates?
Yes, an employer can choose to reimburse at a lower or higher rate than HMRC’s AMAPs, but if the reimbursement is lower, employees can claim the difference as tax relief. If it is higher, the excess is taxable.
Q17: Do you need fuel receipts to claim mileage relief?
No, you do not need fuel receipts to claim standard mileage relief under AMAPs, but if you are claiming actual fuel costs instead of the mileage rate, receipts are required.
Q18: Can you claim mileage for travel between different sites within the same workplace?
No, short trips between different buildings or locations within the same primary workplace are generally not considered business mileage.
Q19: Does using a company credit card for fuel expenses affect business mileage claims?
Yes, if an employer pays for fuel directly using a company credit card, the employee cannot claim additional mileage relief for fuel costs. However, business-related miles can still be logged for employer reimbursement.
Q20: Can part-time workers claim business mileage for their work-related travel?
Yes, part-time employees can claim business mileage under the same rules as full-time employees, as long as the travel meets HMRC’s business mileage criteria.
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