Let’s Break This Down Together...
Missing out on claiming mileage for your work trips? The rules can be confusing, and the last thing you want is to leave money on the table.
In this guide, we’ll walk you through HMRC’s mileage allowance rates for 2024/25, what counts as business mileage, and how to claim whether you’re employed or self-employed. We’ll also cover special cases like electric vehicles and how to maximise your tax relief.
By the end, you’ll know exactly what you can claim and how to do it confidently. Let’s dive in.
What Are Mileage Allowance Payments?
Mileage Allowance Payments (MAPs) are tax-free payments your employer can give you by paying mileage allowance payments when you use your own vehicle for work trips. They’re designed to reimburse you as an employee for the costs of running your vehicle for business use and business related travel. In addition to MAPs, some employers may offer a car allowance or car allowances as alternative ways to compensate employees for using their own vehicle for work purposes.
These payments cover everything from fuel and insurance to repairs, depreciation, general wear, maintenance costs, and business expenses, and are calculated based on HMRC mileage rates. Employers are responsible for reimbursing employees for business mileage, and these reimbursements are typically tax-free if they do not exceed HMRC’s approved standard rates or the same rate for all employees.
Current UK Mileage Allowance Rates (2024/25)
For the 2024/25 tax year, the standard HMRC mileage rates, set by the UK government, remain the same as previous years. Many businesses have relied on these previous rates for calculating mileage reimbursements and ensuring compliance. For cars and vans, including any van used for business travel, HMRC allows 45p per mile for the first 10,000 business miles in each tax year.
After that, the rate drops to 25p per mile, regardless of engine sizes for most vehicles. Motorcycle users can claim a flat rate of 24p per mile, while cyclists can claim 20p per mile for business travel. There is also a passenger rate of 5p per mile for each colleague you carry on business journeys.
These passenger payments are tax-free up to the HMRC limit, encouraging car sharing and helping to reduce carbon emissions. These rates have not changed since 2011, so businesses have continued to rely on them for mileage reimbursement unless HMRC announces future updates. Some employees may choose to use public transport for business travel, and employers may have policies in place to reimburse such expenses.
What Counts as Business Mileage?
Not all driving qualifies for mileage claims. Only trips that qualify as business related travel are eligible for mileage allowance. To be clear, only those trips qualify where the journey is for business use, such as travel between workplaces or to temporary work locations. Your regular commute to a permanent workplace isn’t eligible – HMRC considers this private travel.
However, journeys between different workplaces definitely count when using your own vehicle or a company vehicle for business purposes. So do trips to temporary workplaces where you expect to work for less than 24 months. If you receive a car allowance instead of using a company car, you can still claim mileage for qualifying business journeys in your own vehicle.
Client meetings, site visits, and business errands all qualify as business mileage when undertaken in private vehicles or a company vehicle. Even trips to the post office to send work mail can be claimed.
