Mileage and vehicle costs

Claiming for business travel by car. Approved rates, and the alternative.

What it means

Approved Mileage Allowance Payments let employers reimburse employees tax-free at set rates per mile, with a lower rate above an annual threshold.

Why it matters

Reimbursing above the approved rate creates a taxable benefit. Reimbursing below it lets the employee claim tax relief on the difference.

What it looks like in practice

For the self-employed the choice is between simplified mileage rates and claiming actual costs with capital allowances — and once you choose for a vehicle you generally stick with it.\n\nCommuting is not business travel.

What to watch out for

Company cars. The benefit-in-kind charge on a petrol or diesel car is usually far more expensive than mileage claims on a personal vehicle, and electric cars are the exception.

Where to get proper advice

GOV.UK for the current rates and thresholds, which move most years. Your accountant before acting — this is exactly the kind of question a fee is for.