How to Claim a Tax Rebate on Business Mileage


Hundreds of thousands of people use their own car for work and many do not know that it is often possible to claim tax back on the mileage driven. We answer a number of questions below on this subject:

Am I eligible to claim a tax refund on my business mileage/petrol?
It depends on your situation. If you are using your employer’s car then you will not be able to, but if you are using your own vehicle then there is a good chance that you can.

How much tax can I claim back?
A tax rebate on business mileage is calculated at 40 pence for the first 10,000 miles and 25 pence on any miles after, minus any compensation that you might receive from your employer for using your own car. So for example if you travel 25,000 miles a year, you would be entitled to tax relief of:

(10,000 x £0.40) + (15,000 x £0.25) = £7,750

What if my employer has paid me for using my own car?
Then this amount is then deducted from the tax relief. So in the above example, if you employer has paid you compensation of £2,500, you then have a relief of £5,250.

How do I calculate my tax refund?
Take your tax relief figure, which you have calculated above and then multiple it by your marginal rate of tax. If you are a basic tax rate payer, like most people are, this will be 20%. Therefore in the above example you will be due tax back on business mileage of:

£5,250 x 20% =£1,050

How do I claim my tax refund on mileage?
If you are self employed, you could simply include the above figures in your accounts. Alternatively you can make a claim with the Inland Revenue or apply by submitting a tax return .

 

The above is not advise and can not be taken as it. Tax Fix can not be held responsible for anything written. We advise you seek professional help for commencing any tax work yourself.


226 comments

  1. Alison says:

    Can l still claim if l am paid a car allowance by my employer?

  2. Fahima says:

    I am care assistant. I am working with an agency. I have to go many places every time . Agency provide transport to go work and take me back at home. But I have to pay £8 everyday for transport cost. Can I claim anything for this money back?

Leave a Reply