What you need to know
Claiming business mileage on your Self Assessment can save you hundreds of pounds in tax. Many UK taxpayers miss out on valuable mileage allowance relief simply because they don’t know where to enter it.
Understanding where to enter mileage allowance relief is crucial for those who want to claim mileage tax relief on their self assessment.
The good news is that it’s straightforward once you know the right boxes to complete. Whether you’re self-employed or an employee with unreimbursed business travel, understanding where to enter Mileage Allowance Relief on Self Assessment UK forms is essential for maximising your tax savings.
In this article, we’ll cover exactly where to find the right sections, what information you need, and how to calculate your relief correctly.
What is Mileage Allowance Relief and Who Can Claim It?
Mileage Allowance Relief is a tax break that lets you claim money back on business journeys made in your personal vehicle for business use. Only business use of a personal vehicle qualifies for mileage allowance relief business related travel, such as business trips to a temporary workplace, is eligible, while personal trips are not.
Self-employed individuals can deduct actual business mileage costs from their profits. This reduces the amount of tax they pay on their annual earnings.
Employees can claim relief when their employer doesn’t reimburse travel or pays less than HMRC rates. The approved mileage rate is used to calculate claims for incurred business mileage.
Current rates are 45p per mile for the first 10,000 miles, then 25p per mile thereafter. If your employer pays less than the approved mileage rate, you can claim MAR (Mileage Allowance Relief) for the difference.
You must keep detailed records of all business journeys with dates, destinations, and mileage. Travel expenses for business use of a personal vehicle can be claimed, but not for company vehicles. However, personal journeys like commuting to your regular workplace don’t qualify for relief.
Note: Claiming mileage allowance relief may affect your tax code.
Where Do Self-Employed People Enter Mileage Claims?
Navigate to the “Self Employment (full)” section of your Self Assessment form. Look for the expenses section where you’ll find several boxes for different types of business costs. Make sure to include all allowable expenses related to business use of your vehicle.
Enter your total allowable mileage costs in the “Motor expenses” field. Business expenses can be claimed either as actual costs such as fuel, insurance, and repairs, or by using the simplified mileage rates. The amount you can claim depends on your vehicle type and how much you use it for business.
The simplified rates are often easier to calculate and usually give you a decent deduction. Additionally, consider using HMRC’s simplified expenses if your total motor costs are under £10,000. If you use simplified expenses, you cannot claim separately for costs like road tax or insurance, as these are included in the flat rate.
If your total expenses claim exceeds £2,500, you must include it in your self assessment tax returns.
How Do Employees Claim Unreimbursed Business Mileage?
Go to the “Employment” section and select “Employment expenses”. Find the “Business travel and subsistence” section where you’ll enter your mileage claims.
If you receive a car allowance instead of mileage allowance payments, you may still be eligible to make a mileage claim for business travel expenses that are not fully covered by your allowance.
Enter your total mileage costs in the “Travel and subsistence” box. Calculate your claim by multiplying business miles by HMRC's approved mileage rates for the relevant tax year cars.
Remember to subtract any reimbursement you’ve already received from your employer. Furthermore, you’ll need form P87 or the online claim system if you’re not completing a full Self Assessment.
What Records Do You Need for Mileage Claims?
Maintain a detailed mileage log with precise details such as date, destination, purpose, and miles for each journey. Recording these precise details is essential to support your mileage claim, especially if HMRC or HM Revenue requests evidence.
Keep fuel receipts, insurance documents, and vehicle maintenance records organised throughout the year. Note your odometer readings at the start and end of the tax year for accurate calculations.
Record any employer reimbursements you’ve received for business travel. Store digital copies of all documentation in a secure, organised system that you can easily access.
Consider using mileage tracking apps to automate your record keeping process and save yourself valuable time. Many freelancers I know switched to digital tracking after spending hours reconstructing their travel logs from memory. A good record keeping process will ensure you have all the necessary documentation if HM Revenue asks for proof of your claim.
Common Mistakes to Avoid When Claiming Mileage Relief
Don’t include personal journeys or regular commuting in your business mileage calculations. Only journeys made in a vehicle for business purposes are eligible when claiming mileage tax relief. HMRC are particularly strict about this distinction and know the difference between business and personal travel.
Avoid claiming both actual costs and simplified mileage rates for the same vehicle. It’s one method or the other, not both systems combined.
Don’t forget to subtract employer reimbursements from your total claim amount. Additionally, ensure you’re using the correct HMRC mileage rates for your specific tax year.
Remember that you can’t claim capital costs like the vehicle purchase price. Always round down mileage to the nearest whole mile for complete accuracy.
How to Calculate Your Mileage Allowance Relief Correctly
Multiply your annual business miles by 45p for the first 10,000 miles and 25p for additional miles. For example, if you drove 12,000 business miles, that’s (10,000 x 45p) + (2,000 x 25p) = £5,000.
Before calculating your mileage tax relief, subtract any mileage allowance payments you have already received from your employer from this total. The remaining amount is the mileage tax relief you can claim for the tax year.
Higher rate taxpayers save 40% of their claim, whilst basic rate taxpayers save 20%. Keep separate calculations for different vehicles if you use more than one for business purposes.
Double-check your mathematics and consider using HMRC’s online calculators for verification. Furthermore, maintain clear records of your calculations for future reference.
Assessment Tax Return Deadlines: Don’t Miss Out
Timing is everything when it comes to claiming mileage allowance relief on your self assessment tax return. The deadline for submitting your self assessment tax return is usually January 31st following the end of the tax year on April 5th. Missing this deadline can result in penalties and interest, and may even jeopardize your ability to claim the tax relief you’re entitled to.
To ensure you don’t miss out, keep accurate records of your business mileage and related expenses throughout the tax year. Submit your assessment tax return on time, and use HMRC’s online services to track your claim and stay updated on your tax position. If you’re unsure about any part of the process, consider using tax software or consulting a tax professional to help you claim mileage allowance relief correctly and meet all deadlines.
Staying organized and proactive with your self assessment tax return not only helps you claim the full mileage allowance relief you deserve but also supports your overall financial health by avoiding unnecessary fines and ensuring you pay less tax where possible.
Ready to Get Your Mileage Claims Right?
Claiming Mileage Allowance Relief on your Self Assessment doesn't have to be complicated or stressful. By entering your business mileage in the correct sections and maintaining proper records, you can ensure you're getting all the tax relief you're entitled to.
Remember to keep detailed mileage logs throughout the year rather than trying to reconstruct them at tax time. Start tracking your business journeys today – your future self will thank you when tax season arrives.
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Ready to make your Self Assessment stress-free? Visit Pie.tax today and take control of your tax obligations.
