Claiming for business mileage is often overlooked by many business owners, they tend to forget that claiming for legitimate business mileage is an allowable expense in the eyes of HMRC. Anything that can reduce that corporation tax bill can only be a good thing, right? Before you start claiming for everything under the sun, HMRC does, of course, have a few rules and guidelines to stick to.
You Can Only Claim for Journeys That Are Wholly and Exclusively for Business Purposes
This essentially means you can’t mix business and pleasure on the same trip. With some exceptions. Let’s look at some examples…
Scenario 1: You are a web designer and travel to meet a client in the next town. This is allowable. It’s 100% business-related and is in a different location from your work. All good in the eyes of HMRC.
Scenario 2: You are a web designer and whilst visiting a client in the next town you decide to visit a friend. This is not allowable….we suggest – “sorry I can’t visit you I need to claim my business mileage!”
You Can Only Claim for Journeys That Aren’t Considered ‘Ordinary Commuting’
Any journeys made from your home to your usual place of work are not allowable. Any journeys made elsewhere in the course of your business are. Sound confusing? (This is HMRC remember…) Let’s look at some allowable journeys.
- Delivering goods
- Visiting clients
- Travelling to a temporary location for work
- Visiting a business expo
All allowable, but some of these can get a bit ambiguous, a temporary location is usually somewhere you spend less than 40% of the working week at and less than 2 years in total.
What about driving to your usual office…no.
Driving to the cinema after work… sorry nope
Driving to a country pub for a pub lunch and a beer…. You guessed it…no (sorry about that!)
How Much Can You Claim?
Let’s get down to the nitty-gritty here, how much can you actually claim?
Well, it depends on vehicle type and how many miles.
- If you are travelling by car or van you can claim 45p per mile up to 10,000 miles
Over 10,000 miles you can claim 25p.
- If on a motorbike it’s 24p regardless of distance travelled.
- If you’re on a bicycle it’s 20p for the first 10,000 miles and if you do more than 10,000 miles in a year then either you are Chris Boardman or maybe you should look at purchasing a car?… either way, it’s 20p and some very sore legs.
How Do I Make the Claim?
Your accountant will help you make the claim, what they need from you is a detailed log of all your journeys. Locations, dates, mileage covered and purpose. You can log this by hand, spreadsheet or use any number of free apps to help you. As long as you follow the guidelines and keep great records you can make a claim. If you have any questions about business mileage or any other business claims. Don’t hesitate to give us a call. We like to make sure our clients aren’t paying a penny more in tax than they need to. We’ll ensure you are claiming for everything properly and correctly to minimise your tax bill.