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How to Claim Mileage Expenses

Complete guide to tracking and claiming business mileage through your limited company at HMRC approved rates.

What You'll Need

  • Mileage log (spreadsheet or app)
  • Method to calculate distances
  • Company bank account
  • Accounting software

Step-by-Step Guide

1

Understand what qualifies as business mileage

Business mileage includes travel to client sites, business meetings, and temporary workplaces. Regular commuting doesn't qualify.

Tips
  • •Client visits always count
  • •Temporary workplace (under 24 months) counts
  • •Your regular office doesn't count
2

Set up a mileage log

Create a system to record every business journey: date, start point, destination, purpose, and miles.

Tips
  • •Spreadsheet works fine
  • •Mileage apps are easier
  • •Record at time of journey for accuracy
3

Calculate miles for each journey

Use Google Maps or similar to calculate actual miles driven. Be consistent in your measurement method.

Tips
  • •Round to nearest mile
  • •Use same route calculation method
  • •Screenshot for evidence if needed
4

Apply HMRC mileage rates

Use Approved Mileage Allowance Payments: 45p per mile for first 10,000 miles, 25p thereafter (cars).

Tips
  • •Motorcycles: 24p per mile
  • •Bicycles: 20p per mile
  • •Rates cover all car running costs
5

Submit expense claim to your company

Claim the mileage from your company. Transfer the amount from company account to your personal account.

Tips
  • •Keep mileage log as evidence
  • •Process regularly (monthly is ideal)
  • •Reference as 'Mileage expenses'
6

Record in company accounts

Enter the expense in your accounting software as 'Motor expenses - mileage'. This is tax-deductible for the company.

Tips
  • •No VAT to reclaim on mileage
  • •Corporation Tax deductible
  • •Separate from other motor costs
7

Claim additional expenses

Parking, congestion charges, and tolls for business journeys can be claimed separately on top of mileage.

Tips
  • •Keep receipts for parking etc
  • •These are on top of mileage rate
  • •Don't double-count anything

Common Mistakes to Avoid

Claiming commuting as business travel

Not keeping detailed mileage records

Using actual costs instead of HMRC rates (more complex)

Forgetting to claim parking separately

Frequently Asked Questions

What are the HMRC approved mileage rates?

The approved mileage rate for cars is 45p per mile for the first 10,000 miles and 25p per mile thereafter. Motorcycles are 24p per mile, and bicycles are 20p per mile. These rates cover fuel, insurance, road tax, and wear and tear.

Can I claim mileage for commuting to my office?

No, travel between your home and permanent workplace is considered commuting and is not an allowable expense. However, if you work from home and travel to a client site or temporary workplace, those journeys can be claimed as business mileage.

Do I need to keep a mileage log for HMRC?

Yes, HMRC requires you to keep a contemporaneous mileage log recording the date, destination, purpose of the trip, and miles driven. Without proper records, HMRC can disallow your mileage claims during an enquiry. Digital records via an app are perfectly acceptable.

Can I claim both mileage and actual car costs?

No, you must choose one method and stick with it. The simplified mileage rate (45p/25p) covers all running costs. Alternatively, you can claim actual costs (fuel, insurance, repairs) and apply a business-use percentage. Most sole traders and directors use the mileage rate for simplicity.

Can I claim mileage for using an electric vehicle?

Yes, the same HMRC approved mileage rates apply to electric vehicles: 45p per mile for the first 10,000 miles and 25p thereafter. There is no separate rate for EVs. If you charge at home, the electricity cost is covered within the mileage allowance.

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