Can I Claim Business Mileage as a Business Expense?
Yes - at HMRC approved rates: 45p/mile for first 10,000 miles, 25p after.
What HMRC Says
Business mileage in your personal car can be reimbursed by your company tax-free at HMRC approved rates.
When You Can Claim
- Driving to client meetings
- Trips to suppliers or business events
- Travel between business locations
- Picking up business supplies
When You Cannot Claim
- Daily commute to regular workplace
- Personal errands during business trips
- Mileage already reimbursed by a client
Good to Know
HMRC rates: Cars: 45p (first 10k), 25p (thereafter). Motorcycles: 24p. Bicycles: 20p.
Record keeping: Keep a mileage log: date, from, to, purpose, miles
Understanding Business Mileage Expenses
Business mileage is one of the most valuable tax-free payments your limited company can make to you. When you use your personal car for business journeys, your company can reimburse you at HMRC's approved mileage allowance payment (AMAP) rates: 45p per mile for the first 10,000 business miles in a tax year, and 25p per mile thereafter. This reimbursement is tax-free for you and deductible for the company. No income tax, no National Insurance.
The 45p rate is designed to cover all the costs of running your car for business: fuel, insurance, road tax, servicing, depreciation, and wear and tear. This is important because it means you cannot claim mileage rates AND actual car running costs. It is one or the other. For most directors using a personal car, the mileage rate is simpler and often more generous than tracking actual costs, particularly if you drive a modest car.
What counts as a business mile is determined by the same rules as business travel generally. Journeys from your permanent workplace to a temporary workplace (client site, meeting, business event) are business miles. Your daily commute from home to a permanent office is not. If your home is your permanent workplace (common for sole directors), virtually all business driving is claimable because every destination is a temporary workplace.
Record-keeping is non-negotiable. HMRC can ask to see your mileage log at any time, and without one, your entire mileage claim can be disallowed. For each journey, record: the date, start location, destination, purpose of the journey, and miles driven. You can use a simple spreadsheet, a dedicated mileage tracking app (many are free), or even a paper log book. The key is contemporaneous recording - do not try to reconstruct months of mileage from memory at year end.
For electric vehicles used personally but driven for business, the same 45p/25p rates apply. Despite the lower running costs of EVs, HMRC has not created a separate lower rate for electric cars (as they have for advisory fuel rates for company cars). This makes the mileage allowance particularly generous for EV drivers, as the actual cost per mile for electricity is significantly less than 45p. This is a genuine tax windfall that EV owners should take advantage of.
Real-World Examples
Consultant claiming regular client visits
Rachel drives her personal car to three client sites per week, averaging 600 business miles per month (7,200/year). Her company reimburses her at 45p/mile, totalling £3,240/year. This is tax-free income for Rachel. She maintains a spreadsheet mileage log with date, client name, and miles for each trip.
Director exceeding 10,000 business miles
James drives 15,000 business miles in the tax year. His first 10,000 miles are reimbursed at 45p (£4,500), and the remaining 5,000 miles at 25p (£1,250), totalling £5,750 tax-free. The rate drop is significant, so James considers whether a company car might be more efficient for his high mileage.
Electric vehicle owner maximising mileage claims
Sophie drives a personal Tesla and claims 8,000 business miles at 45p/mile (£3,600/year). Her actual electricity cost for those miles is approximately £800 (at 4p per mile). The £2,800 difference between the mileage payment and actual cost is a legitimate tax-free benefit of using the approved rates. HMRC has confirmed the 45p rate applies to EVs.
Company not reimbursing the full HMRC rate
Tom's company reimburses him at 30p/mile instead of 45p. For his 6,000 business miles, he receives £1,800 from the company. He can claim Mileage Allowance Relief (MAR) on his personal tax return for the shortfall of 15p/mile on 6,000 miles (£900), reducing his personal tax bill.
Common Mistakes to Avoid
- Not keeping a contemporaneous mileage log - reconstructing journeys from memory at year end is unreliable, and HMRC can disallow the entire claim without proper records
- Claiming mileage for your daily commute to a regular office - ordinary commuting is never business travel, even if you work long hours or carry equipment
- Claiming actual fuel costs AND mileage rates - you must choose one method; the mileage rate already includes fuel as part of the 45p per mile
- Forgetting to reduce the rate to 25p after 10,000 business miles in the tax year - the 45p rate only applies to the first 10,000 miles, and overclaiming is a common error
Frequently Asked Questions
What is the HMRC mileage rate for 2025/26?
The approved mileage rate for cars is 45p per mile for the first 10,000 business miles and 25p per mile thereafter. Motorcycles are 24p per mile with no tiered reduction. Bicycles are 20p per mile. These rates have not changed for several years and apply to the 2025/26 tax year.
Can I claim 45p per mile for an electric car?
Yes. HMRC's approved mileage allowance payment rates apply equally to petrol, diesel, hybrid, and fully electric cars. The 45p per mile for the first 10,000 miles and 25p thereafter applies regardless of fuel type. For EV drivers, this is particularly generous as actual running costs are much lower.
Do I need to keep a mileage log for HMRC?
Yes. You must keep records of each business journey including the date, start and end points, purpose, and miles driven. HMRC can request this at any time during an enquiry. Without a mileage log, your entire mileage claim can be disallowed. Use a spreadsheet, app, or paper logbook.
Can I claim mileage from home to a client?
Yes, if your home is your permanent workplace. Travel from home to a client site is a business journey to a temporary workplace. If your permanent workplace is an office and you go home first then drive to a client, you can claim the home-to-client distance minus the normal commute distance, or simply the office-to-client distance if shorter.
What happens if my company pays me less than 45p per mile?
If your company reimburses you at less than the approved rate, you can claim Mileage Allowance Relief (MAR) on your personal self-assessment tax return for the difference. For example, if your company pays 25p/mile and you drive 8,000 business miles, you can claim tax relief on the 20p/mile shortfall (£1,600).
Source: HMRC EIM31200 - Car mileage: approved mileage allowance payments
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