Have you had to use your own vehicle for business related travel in the past 4 years?
Do you travel to different sites or areas for your job?
Do you get reimbursed by your employer for your mileage costs?
Did you know you are entitled to up to 45p per mile? If you do not get reimbursed or get less than 45p per mile you may be entitled to claim.
Anybody who has had to use their own vehicle for business use can make a tax relief claim. We work on a no refund no fee basis so you’ve got nothing to lose!
When your employer is working out how much tax to deduct from your wages they will usually add up your total salary and then take away certain ‘allowable expenses’. The amount they end up with is then your taxable earnings i.e. the ‘pre-tax’ earnings you are then required to pay tax on.
Mileage allowance relief works by decreasing your taxable pay by taking into account the amount of miles you drove on business during the year, multiplied by the Approved Mileage Rates provided by HMRC. This serves to then lower your taxable pay – sometimes by quite a lot – which means you pay less tax overall. In general, mileage is an allowable expense and if you haven’t claimed it then your taxable pay is too high and you are paying too much tax.
Mileage allowance tax relief is never just given automatically – in order to benefit from it you must actively claim for it.
You can calculate your possible Mileage Allowance Relief by multiplying the amount of miles you traveled on business mileage by HMRC’s Approved Rates like the example below.
The results will give you the amount you can claim tax relief on, not the actual tax rebate. Typically you will receive between 20% – 40% of the final amount back as a rebate – depending on the rate of tax you pay.
Mileage Allowance Relife example: You travel 7,000 miles per year in your own car on business duties (e.g. to visit clients and suppliers), and your employer pays you 30p per mile (15p less than HMRC’s Approved Rate). Over the past four years that adds up to:
2011/12 – 7,000 x (45p-30p) = £1,050
2012/13 7,000 x (45p-30p) = £1,050
2013/14 5000 x (45p-25p) = £1,050
2014/15 5000 x (45p-25p) = £1,050
Total Mileage Allowance Relief = £4,200
In simple terms, business mileage can be any miles you travel while carrying out any duties of your job. It does not refer to any mileage incurred while commuting to and from your place of work.
As an example, a builder might be required to visit different construction sites in their own car as part of their day-today duties , or a social worker or healthcare assistant may be required to make various home visits as part of their job.
If you are not sure whether the mileage you have incurred would be considered for ‘business use’ or not, then get in touch with us and we will assess your claim – it’s better to find out for sure rather than just assume and end up missing out on a refund.
For those using their own car for business, the rate of relief is 45p per mile for the first 10,000 miles traveled in a given tax year.
When you get over 10,000 miles in the year, the rate for every additional mile is 25p per mile. It’s important to note that these Approved Rates do not take into account the model of vehicle being driven – so the same rate is currently paid to those that drive a high-performance vehicle as to those that drive a smaller, more fuel-efficient vehicle.