30th January 2020
Are you using your own car for business trips? If yes, this guide will explain what you can claim through your limited company.
Who can claim mileage?
As a company director, you can claim an HMRC-approved mileage allowance directly from your company through reimbursement. If you have any employees, they can also claim through the business expenses system you use.
Whether you use a bike, a motorcycle or a car, it has to be your own vehicle to be able to claim, as different rules apply to company-owned vehicles.
What can be claimed?
The HMRC-approved rate for passenger cars is 45p per mile for the first 10,000 miles and 25p after. The rates for bicycles and motorbikes are lower, as per the table below.
| First 10,000 business miles in the tax year | Each business mile over 10,000 in the tax year | |
|---|---|---|
| Cars and vans | 45p | 25p |
| Motorcycles | 24p | 24p |
| Bicycles | 20p | 20p |
The reimbursement amount you receive from the company should cover not only the petrol but the maintenance and wear and tear of your vehicle.
What records are required for evidence?
It is advised that you keep a log of your business trips. Make sure to include the start and the end destination with the date and the number of miles driven. It is also advisable to keep the fuel receipts as part of your records.
What about VAT?
If your business is registered for VAT on the standard scheme, then there is some good news, as you can claim a small percentage of the mileage back on your tax return.
We will not bore you with how the VAT on the mileage allowance is calculated; your accountant should work it out for you when preparing your VAT return.
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