Question

How do mileage expenses work?

Mileage expenses are to reimburse employees using their vehicles for work.

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Mileage expenses claims are to reimburse employees for using their private vehicle for work purposes. The payment is a contribution towards costs of fuel, insurance, wear and tear, and maintenance of the vehicle.

Mileage claims for cars

The standard HMRC approved rate for cars is 45p per mile for the first 10,000 miles and then 25p per mile for each additional mile over 10,000 in a tax year.

Mileage claims for motorbikes

The standard HMRC approved rate for motorcycles is 24p per mile.

How to claim

In order to claim the driver should keep an accurate record of miles covered as well as other related travel details such as date, purpose of travel and locations visited.

How to pay

Businesses can pay mileage claims either as part of their monthly payroll or as direct payments. They can pay employees a certain amount of Mileage Allowance Payments each year without having to report them to HMRC. Anything above the approved amount will need to be reported and added to the employees pay with usual tax deductions.

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