Do you ever use your car for business journeys?
Do you pay for your own fuel?
If so, you may be eligible to claim car mileage allowance.
So what is the car mileage allowance?
Basically, you can claim over 45p tax free as a mileage allowance if you use your own car for a business journey.
HMRC allows you in most circumstances to claim mileage at a rate of 45p per mile for the first 10,000 business miles in a year (this is an increase of 5p per mile since April 2011) and then 25p per mile thereafter.
If your employer will only re-imburse you at 35p per mile then you can claim the additional amount as a deduction from your taxable income from HMRC through your tax return.
Also, if you travel with two or more people from the same business, the driver can claim an additional 5p per mile passenger rate for each qualifying passenger. Hooray!
So, if 5 of you travel together, you could claim 65p per mile (45p for the driver plus 4 x 5p per mile for each passenger). To qualify, each of the passengers must be employed by, or be an officer of the business.
Car mileage allowance rates
The HMRC approved car mileage allowance rates are as follows:
- Cars & Vans 45p (first 10,000 miles and 25p thereafter)
- Motorcycles 24p
- Bicycles 20p
All HMRC information here: http://www.hmrc.gov.uk/payerti/exb/a-z/m/mileage-expenses.htm
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