Are You Claiming Tax Expenses for Using Your Own Vehicle for Work?

Do you use your own car, van, motorcycle or cycle for work journeys?

If so, you are eligible to be paid an allowance by your employer to cover any costs you incur.  And, as long as you comply with certain rules, these payments can be made to you free of fax and National Insurance Contributions (NICs).

Tax-free payments

There are three rules that you must comply with in order to receive these expenses payments free of tax:

  • The payments must be made to you directly (and not to someone else on your behalf)
  • The payments must be in relation to expenses you have incurred for using your own vehicle for work journeys
  • The payments must be within a set limit, fixed by law

The rules for receiving payments without NICs deducted are slightly different, and your employer is responsible for working out what you can claim.

What is a ‘work journey’?

Any journey that you have to make as part of your work is considered a work journey.  Examples would include making deliveries to customers and visiting clients at their homes.

Your normal ‘commute’ – i.e. your journey to and from your normal place of work every day – is not considered a ‘work journey’ for expenses purposes.

How much can I claim?

The amount that you can claim depends on what vehicle you use – whether it is a car or van, cycle or motorcycle.  HMRC publish a list of set ‘mileage rates’ for each of these three vehicles and you can therefore claim the number of miles you have travelled on ‘work journeys’ by the set mileage rate for the vehicle you have used.

You should be aware, however, that there is a maximum tax relief amount that you are able to claim in one year, even if your travel expenses exceed this amount.  Details can be found via HMRC.

If your employer already pays you an amount above the fixed HMRC rate, any excess is taxable as income.  Similarly, if your employer pays you a lower mileage rate than the set HMRC figure, you can claim Mileage Allowance Relief by using form P87 or writing to HMRC.

Keep records

It is important that you keep good records of any business mileage that you have undertaken.  Your employer will need to see the records to determine the level of expenses payments, and HMRC may need it if you wish to claim Mileage Allowance Relief.

8 comments

  1. JUdith Walker says:

    I have claimed £372 for travelling expenses with my job, I expected this to be paid back to me by the tax office as a lump sum. My earnings for this year is £5942 which is less then my personal allowance of £6475 The tax office has sent me a cheque for £36.40 which is the tax taken from me from my employers
    The £372 has been taken off my income and reduced it further below the personaltax allowance, this cannot be correct?

  2. g white says:

    should pay tax on petrol money i claim for using my car for work

    • TaxFix says:

      g white: You can’t claim for travelling to your place of work, but you can claim tax relief for any mileage that you use your car for allowable work related travel.

  3. Sharron says:

    An MOT Garage has bought a car (the car is use for picking up and dropping of clients so they dont have to wait while there car is being fixed), Can he claim for this expense

  4. Irene says:

    Can I claim mileage allowance from home directly to clients’ premises – even if the premises are in the same vicinity as my base office?

  5. Pat O'Neill says:

    Hi,
    I work at different locations and sometimes go there direct from home with out going to our “main office” as these are Tempory places of work can I claim mileage tax relief from my home to these places of work
    I am sure I have read a detailed explanation on the HRMC but cannot find it again
    Cheers
    Pat

  6. Murray Gray says:

    Hi – my normal place of work is officially my employer’s office but for over a year I have been based in a client’s office.

    I commute directly to & from the clients office from my house every day, using my own car.

    I have been told by my employers that the only claim I could submit for this daily journey would be for the mileage from my normal place of work (employers office)to the client’s office, but I could only claim this mileage if I first drove to my normal place of work (employers office) then to the clients office – and the same for the return journey!

    Consequently I have not claimed any expenses from them for this daily commute. Can you confirm if what they have told me is correct?

    Thanks & Best Regards

    Murray Gray

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