Do you use your own vehicle for work purposes?
If so, it may be possible for you to claim petrol expenses. Whether you are employed or self employed, you can often claim the cost of using your own car for work.
Our guide looks at how you claim petrol expenses if you are employed or self employed.
Claiming petrol expenses if you’re employed
If you use your own car, van or motorcycle for work, you can claim ‘mileage allowance relief’ on the miles that you travel. However, you can’t claim all the mileage that relates to your work. For example, you can’t claim the mileage between your home and your normal place of work and you can’t claim petrol expenses for any private mileage that you do.
However, you may be able to claim mileage if you use your own car to visit clients or you use your own van for collections and deliveries.
To work out the petrol expenses you can claim, you need to work out your total business mileage in your own vehicle. If you use different vehicles (a car and a van, for example) you should total up the miles you have done in each vehicle.
You then need to find the ‘approved mileage rates’ from the HMRC website. As of 2011/12, the rates are:
- Car – 45p/mile for first 10,000 miles then 25p/mile thereafter
- Motorcycle – 24p/mile
- Bicycle 20p/mile
You then multiply your business miles by the approved mileage rate to work out the total ‘approved amount’. Once you have done this, you should deduct the petrol expenses that you have already received from your employer.
If you’ve been paid less than the ‘approved amount’ you can claim mileage allowance relief on the difference. If your employer has paid you more than the ’approved amount’ you may have to pay some tax.
Claiming petrol expenses if you’re self employed
If you are self-employed and use your own vehicle for work purposes, you may be able to claim petrol expenses as an allowable business cost.
You can use the same mileage rates as above. You multiply your total business mileage by the mileage rate.
For example, if you had done 2,000 business miles in a car, you could claim £900 (2,000 x £0.45).
There is a maximum amount of tax relief that you are able to claim in one tax year, even if your travel expenses exceed this amount. The annual limits are on the HMRC website.
You should ensure that you keep careful records of your business mileage as HMRC may want to see proof of the miles that you have done.