Mileage Allowance

The Mileage Allowance is a tax-free allowance for people who use their vehicles for work. You can use it if you drive for business in a car, van, or bike. It doesn’t matter whether you’re self-employed or a full-time employee, you can claim back some of the time you’ve spent on the road for business.

How do you know if you’re eligible to claim the Mileage Allowance?

Ultimately, anyone who uses a vehicle for work can claim the mileage allowance. However, if you bought the car solely to use for work, for example to work as an Uber driver, there might be other tax-relief schemes you’ll want to use instead to account for leasing the vehicle or depreciation as a result of driving for work. If this is just your personal car that you also use to drive to meetings for example, you can claim the mileage allowance.

How much you can claim depends on how much you travel for business:

  • Car or van: 45p/mile, which goes down to 25p/mile for every mile after your first 10,000 miles
  • Motorbike: 24p/mile, regardless of distance
  • Bike: 20p/mile, also regardless of distance

If you’re self-employed and you’re not part of a limited company, then you might want to use simplified expenses instead.

How to claim the Mileage Allowance

You can claim the allowance through your annual Self Assessment tax return. Remember to file your Self Assessment by 31st January the year after the tax year you’re paying for. For example, if you earned money for your business between 6th April 2023 and 5th April 2024, you’re paying your 2023/2024 tax return. This bill should be paid by 31st January 2025.

Frequently Asked Questions

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