How to reclaim business mileage on a company car
This article is to assist with the hassles of assessing and claiming tax
You can claim back mileage for your business travels if the car is provided by your company.
The rate that would have been paid for your personal vehicle will be different to what you can claim back mileage on a company vehicle.
If company pays for your fuel
You will pay for fuel benefit tax if you opt for the company to pay for your fuel expenses for both, private and business journeys.
Fuel benefit tax is multiplied by the car’s ‘Benefit-in-kind’ (BIK) percentage and your salary tax band, based on £22,600 for the current tax year, or £23,400 for 2018/2019.
If you have a company car, you will have to pay tax as Benefit-in-kind tax charged on employees who receive perks on top of their salaries. This will be paid along with fuel benefit tax.
If it is expected to clock a high number of miles then opting out of the fuel benefit might be sensible. Also it is advisable to choose a company car with low CO2 emission for paying minimum amount of tax possible.
If you pay for your own fuel
Advisory fuel rates are set every year by the HMRC. Use the mentioned rates if you pay for fuel expenses and reclaim the miles for business travels.
Different cars have different engine sizes and fuel types and hence advisory fuel rates will vary accordingly. The rates are subject to frequent changes and are updated four times a year. It is likely that your company’s rates will be slightly different as these rates are only for guidance purpose.
To gain an idea on how much you can reclaim when paying for your own fuel, please view the latest advisory fuel rates.
For petrol cars:
|Engine Size||Petrol – amount per mile||LPG – amount per mile|
|1400cc or less||11 pence||7 pence|
|1401cc to 2000cc||14 pence||9 pence|
|Over 2000cc||21 pence||14 pence|
For diesel cars:
|Engine size||Diesel – amount per mile|
|1600 cc or less||9 pence|
|1601cc to 2000cc||11 pence|
|Over 2000cc||13 pence|
If you use a pool car
A company may provide vehicle for use by one or more employees known as a pool car.
The fuel expenses of the pool car is paid your company or you should file your receipt and get it reimbursed, if it is paid by you.
No tax is paid for using a pool car.
If you use your own car for business
Grey fleet is the term commonly used for this kind of an arrangement.
Employees who use their own vehicle for business purposes, HMRC has set sets Approved Mileage Allowance Payments (known as AMAPs). Employees are asked by the company to use these to reclaim business miles. You can claim AMAP’s if you use your won vehicle for business purposes.
Business mileage is added up and multiplied by the approved mileage rates to assess how much you can reclaim.
|From tax year 2011 to 2012 onwards||First 10,000 business miles in the tax year||Each business mile over 10,000 in the tax year|
|Cars and vans||45p||25p|
In contrast the engine size is irrelevant if you’re using a car provided by the company.
If you’re paid a lower mileage rate, you can claim tax relief on the difference. For example, if the company pays 35p per mile up to 10,000 miles, you can claim the remaining 10p per mile from the government.
A tax relief can be claimed on the difference if you are paid lower mileage rate. For example if your company is paying only 35p pre mile up to 10,000 miles, you can claim the remaining 10p per mile from the HMRC.
If you are paying for your own fuel expenses and claiming mileage allowance for the same or company bears all your fuel expenses and charging you mileage for personal use of the vehicle:
You can either calculate the actual fuel cost/mile or use a set rate published by HMRC.