Millions of UK motorists could be paying too much tax to HMRC simply by failing to claim for business-related journeys made in their personal cars, a leading personal finance expert has revealed.
How HMRC's Mileage Allowance Can Save You Money
According to personal finance expert Kim Sones, anyone using their own car for work purposes – such as meeting clients, travelling to job quotes, or collecting materials – could be significantly overpaying their tax bill if they are not claiming mileage expenses.
HMRC permits individuals to claim 45p for every mile driven for business during the first 10,000 miles in a tax year. For any business mileage beyond that threshold, the rate drops to 25p per mile.
"If you drive 10,000 miles for work, that's a substantial £4,500 you can claim as an expense," Sones explained. "This directly reduces your taxable profit by the same amount. The best part is that you can pay yourself that money completely tax-free."
What Journeys Qualify and How to Claim
It is crucial to understand which trips are eligible. Regular commuting from your home to your usual workplace does not count, as HMRC classifies this as private travel. However, any business journeys undertaken outside of your normal commute are valid for a claim.
Sones advises drivers to maintain a simple log of their business mileage, noting the dates and distances of each qualifying journey. "Keep a basic mileage log, or consider using a dedicated app like Trip Catcher," she suggested. "You then pass this record to your accountant at the end of the tax year."
This approved mileage rate is designed to cover the comprehensive costs of owning and running your vehicle. Consequently, you cannot make separate claims for individual expenses like fuel, electricity for electric vehicles, vehicle tax, MOTs, or repairs.
Essential Steps to Take Now
To determine your exact claim for a tax year, HMRC states that you must keep detailed records of the dates and mileage of all your work journeys. You must also calculate the total mileage for each type of vehicle you have used for business purposes.
Furthermore, any mileage allowance paid by your employer must be deducted from the total amount you can claim from HMRC.
"Don't give HMRC more money than you need to," Sones urged. "Track your mileage. Claim what is rightfully yours, because you've earned it."
