You’re using your own vehicle for your business, but what can you claim?
It is common to use your own vehicle for your business, or for your employment, but do you know what you can claim and how to claim?
Let’s go through some common questions:
Can I put fuel and running costs for my own vehicle through the business?
No. If you own your vehicle personally, you can’t claim fuel, servicing, MOTs or running costs.
You can claim for mileage on the business trips you make.
The mileage rates include fuel, wear and tear, running costs and MOTs, so you should only claim mileage.
If the company owns the vehicle, then the company would pay the running costs, and not you.
What business trips can I claim for?
You cannot claim for travelling from home to your place of work, or to a temporary place of work.
You can claim for any trip that is specifically for business, for example:
- visiting customers or suppliers
- picking up supplies
- delivering goods
- travelling to training and conference events
What can I claim?
For cars and vans you can claim 45p per mile, for up to 10,000 miles each tax year.
For mileage above 10,000 each tax year, you can claim 25p per mile.
There are also different rates you can claim for different modes of transport, as follows:
- Cars and vans up to 10,000 miles: 45p per mile
- Cars and vans above 10,000 miles: 25 per mile
- Motorbike: 24p per mile
- Bicycle: 20p per mile
- Passengers: 5p per mile
*These rates are correct as at October 2021
My company owns the vehicle, but I have to pay for my own fuel, what can I claim?
In this case, you can claim the “fuel only” element of the mileage rates above.
The fuel element is set by HMRC, and depends on the type of vehicle, type of fuel and engine size, and changes regularly.
Nightmare to keep track of, but we have a better way!
Can I claim VAT on mileage rates?
If your business is VAT registered, you can claim VAT on the fuel element of the mileage.
This means that you do have to keep an eye on HMRC’s advisory fuel rates, as this is the bit to claim VAT on.
My boss won’t pay me the full approved mileage rates, what can I do?
- You can make a claim to HMRC each year for a refund.
- You can claim the difference between the approved mileage rate, and the actual rate your employer pays.
- For example, if your employer only pays 20p per mile, you can claim tax back on the extra 25p from HMRC.
- You’ll also need to keep detailed records in order to make a claim.
- If you complete a self-assessment tax return, you should enter the mileage costs on the employment pages.
- If you don’t have to complete a tax return, you can make a separate claim. Find out more and make a claim here.
My boss pays me more than the approved mileage rates, how do I declare this?
- In this case, your boss needs to complete an annual P11D, which is a report to HMRC of benefits and expenses paid to you.
- Your employer would need to declare the amount paid to you, over and above the approved rates.
- You will then pay personal tax on this amount, and your boss will pay employers’ national insurance.
You may want to decline the extra mileage, it would probably be a lot easier!
How do I keep a record of the mileage I want to claim?
HMRC are very specific about the information they want to see on your mileage records, which needs to include:
- type of transport
- date of the journey
- where you were travelling from
- where you were travelling to
- reason for the journey
- miles claimed for
- mileage rate used
You could keep a record of this in your diary, in a notebook or a spreadsheet, but then you’d also have to keep a record of the 10,000 miles threshold, and any VAT claims.
So of course we have a much easier way!
Recording your mileage the easy way
Recording can be time consuming and frustrating!
We have partnered with Tripcatcher to provide you with their mileage app which records all of the info that HMRC needs, and takes moments to record a journey!
To save you lots of hassle, Tripcatcher manages all of this through their very easy to use app:
- keeps a record of the 10,000 miles threshold each tax year.
- updates regularly when HMRC update their new advisory fuel rates
- If you’re VAT registered, it also claims the VAT for each journey
- links to google maps for accurate miles and return journeys
- records additional mileage rates, including passengers
- allows you to set favourites and repeat journeys
- better yet, it integrates with Xero, so you can push your mileage across to Xero every month.
If you’d like us to get you set up on Tripcatcher, just complete our quick online form to provide your details.