Claiming business mileage undertaken in a private car
You can claim business mileage undertaken in a private car using the tax-free AMAP rates
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  • AMAPs in brief: these are the mileage rates you can claim for using a private car on business trips. AMAPs is an acronym for Approved Mileage Allowance Payment rates. The AMAP rates are tax free.

THERE are many SME firms that don’t have a company car policy but ask employees to use their own private car for business use.

Reimbursement for the business mileage is usually offered by paying an approved mileage rate.

These are known as Approved Mileage Allowance Payments. This is often abbreviated to AMAPs.

Here’s how it works.

Using AMAPs you may reimburse a staffer who has used their private car on business up to the amount shown below. The employee is not liable for tax on it.

AMAPs can also be used if you run your small business as a limited company but use your private car for business.

The statutory mileage AMAP rates

  • Up to 10,000 miles: 45p per mile; 10,000 miles or more: 25p per mile

These AMAP rates have been current from April 06, 2011.

The statutory mileage AMAP rates are the same for all cars, irrespective of engine size. For smaller cars, they are quite generous. But they may not cover the costs for larger vehicles. On the other hand, for electric vehicles they are fantastically good news.

The government wants to encourage drivers into more fuel-efficient vehicles – and reduce the UK’s carbon dioxide (CO2) emissions.

AMAPs are higher for the first 10,000 miles per year to reflect standing annual costs of motoring, such as Vehicle Excise Duty, business use insurance and depreciation for extra wear and tear.

For every subsequent mile, the mileage rate is lower. This is also to discourage unnecessary business mileage, which is another part of the government’s drive to reduce CO2 emissions.

If you carry passengers on a business trip, they can be claimed for at an additional 5p per mile.

What if you pay less than the AMAP rate?

If an SME decides to pay its staff a lower mileage rate than those in the AMAP table above, the employee can claim tax relief on the difference in their annual return (which is known as Mileage Allowance Relief).

AMAPs can also be paid for using a motorbike on business (24p per mile) and cycling on business (20p per mile). There are no mileage limits on these rates.

AMAPs cannot be claimed for each separate car: they are cumulative for the person claiming them – so you cannot claim 10,000 miles in car 1 at 45ppm and then another 10,000 miles in car 2 at 45ppm.

What if I’m self-employed?

If you are self-employed and use your private car for business trips you can also use the AMAP rates. However, you cannot use AMAP rates AND write off a percentage of running costs and fuel against tax.

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10 COMMENTS

  1. Please could you advise me.

    After 8weeks of unemployment I was offered a job as a Home Carer. After working 9 of the last 11days, I am going in today to register a formal grievance at not being paid the National Minimum Wage. This is because I am not paid for time spent travelling between clients, eg: I worked two split shifts on Saturday (more often than not, I work two split shifts) in total, I worked 13.75 hrs, and will be paid for 9.

    This does not reflect a reasonable wage for only having 45 minute break at home per day, and 5hours sleep a night!!!

    To add insult to injury, I am paid 20p per mile fuel allowance, and no additional passenger rate. Is the AMAP of 2011, legally binding, or just a guideline, ie: is there anything I can do to make my employer pay me a more realistic or comparable rate? Many Thanks

  2. Marianne
    I cannot comment on your employment contract but can help with the mileage payments.

    If you are using your car for business purposes – and this includes your job by the sounds of it – you get an AMAP allowance of 45p per mile.

    However, there is no legal obligation on your employer to pay this – but you can claim the difference in your tax return at the end of the year (ie 25p per mile for each business mile) to take it up to the tax-free AMAP limit. If you take a passenger you can add a further 5p per mile.

    It is important to keep a note of your business mileage though and ensure your car is correctly insured for business use.
    Ralph Morton, editor

  3. Marianne,

    Ralph is correct about the AMAP payment in that there is no obligation for the employer to pay the approved rate. There are a couple of stings in the tail of claiming the difference though:

    1. You have to wait to get any of that money back from HMRC
    2. You won’t actually receive the full difference, only at the rate at which you pay tax. So claiming, say, 6k miles at 25p per mile = £1500 x Tax Rate 20% = £300

    Of course if you are below the tax threshold then you should recieve the full amount.

    However, I would be of a mind to seek advice from an employment solicitor or perhaps a Citizens Advice Bureau about the fact that they don’t include the travelling between clients as working time. If you are travelling directly from one client of theirs to the next then I think that they are on very shaky ground. However, taking this further I would more be of a mind to seek alternative employment with an employer who treat their staff with more respect. The chances are that if you did take them to task over this they might well find a reason not to extend your employment beyond the probationary period. Perhaps move on and then report them?

  4. I am a company owner and have a company vehicle, a 100% electric Nissan Leaf.

    I personally pay for the electricity that powers it which is about 6kW for 5 hours for every 70 miles= £3.60/70 or 5p/mile or £400/yr. No where can I find a rate for mileage in an electric car so I can claim it back. I have record of the usage for the car only every month plus mileage driven. Can you assist?

    Hello Chris, thank you for your question.

    It’s bad news for you I’m afraid. HMRC says that “advisory fuel rates are based on the average price of fuel per mile – electricity is not a fuel”. While I know organisations such as ACFO are having ongoing discussions with HMRC about this, at present there is no way you can reclaim this.

    It would be different if you had bought the car privately and then expensed the running costs through the company via the AMAP rates, which would be 45p per mile tax free for all business mileage.

    Ralph Morton, editor

  5. An employee is paid a monthly car allowance by his employer. This is a taxable payment and is in lieu of his employer providing the employee with a company car. The employee uses his own private car on business mileage.

    Q: Can the employee claim business mileage (at approved HMRC rates) for use of a private car when the employee is paid a car allowance which in theory is to allow the employee to purchase his private car?

    Colin Tourick, fleet and leasing consultant, replies

    Yes, the employee can claim the AMAP rate. However, you don’t make clear who the employee plans to claim from.

    If he plans to claim from the employer that’s fine – the normal 45p/25p AMAP limit applies. So long as the employer is actually prepared to pay this amount!

    Normally the employee who gets a car allowance claims mileage at Xp per mile from the employer to cover the cost of fuel, then claims tax relief on the rest of the 45p/25p AMAP limit via their tax return.

    • Hi
      Can you help on this one.

      I work for a large construction company and receive a car allowance per year to help purchase a car for business use.
      I only get paid 11p per business mile – can I claim the difference back from HMRC or do I need permission from my employer.
      Thanks

      Hi,
      Just claim the difference on your tax return form. This is known as Mileage Allowance Relief.

      Ralph Morton, editor

  6. My employer pays me a car allowance of £5,000 per annum, plus a mileage allowance of 20p. I already claim tax relief on the difference between 20p and 45p per mile. Should I also be claiming tax relief on 5p per colleague per mile when travelling with others?

    If they are travelling as passengers in your car, then yes you can.
    Ralph Morton, editor

  7. Is business mileage paid from date of travel? Or date it’s paid? In effect if the claim is for 31.3 2016 and 10.100 miles so 25p but the claim is processed and paid 20.4.16 is the mileage paid at 45p and classed as this year’s cumulative mileage ?

    Hi there Heather. Business mileage is applicable from the date of travel, not when it is paid.
    Ralph Morton, editor

  8. Hi there- perhaps you can shed some light..

    I incorporated my LTD company in Aug 2017 – have been Sole trading since 2012- trying to keep on track with all the changes and how to claim AMAP.

    My annual mileage is about 6500 miles. Presently paying the diesel from myself as the employee. Should “I” the director – pay “me”the employee 0.45p per mile at the end of the financial year- can I claim for all my mileage or just 80%? Previously as a self employed sole trader claimed 80 % (allowing for private usage).
    Am a little Confused about the terminology when it comes to “tax relief”
    Does this mean – when the company pays me it wont be considered as income- so when I complete my tax return- I declare it- but it will be disregarded?

    In terms of the LTD company.. am I taxed on “TOTAL income” before the business expenses, salary PAYE to self and payments to employee (me) in respect of diesel and insurance to deliver my services or am I taxed only on what is remaining in the business account after all payments? When a sole trader- total income minus expenses = total the taxed over the personal allowance = simples…

    A lot to learn

    Thanking you so much in advance for you time

    Hello Michelle
    No problem to help with your enquiry. It is very different being a sole trader from an LTD.

    The easiest way to look at it is this. Your company is a separate entity (unlike being a sole trader). For all your business mileage, you claim from your company 45p per mile. Do it monthly and fill in as an expense. The company then pays you. So, say for example, your business mileage was 100 miles in a month, then the company pays you £45.

    Your accountant can reconcile everything at the end of the financial year.

    I hope that helps.

    Ralph Morton, editor

  9. Hi Ralph,

    Please could you just clarify current HMRC AMAP rules on EVs?

    I’m shortly to change my current vehicle (owned by me) and plan to get an EV…current car is a diesel. As with current diesel, EV would be used for business use, with mileage paid by employer. Employer mileage rates for petrol and diesel are currently 14p/mile, with difference between 45p/25p claimed back from taxman.

    Employer is still finalizing rates for EVs, but they are likely to be in 4 – 7p/mile ballpark.

    Does this mean that under AMAP I’d be able to claim the difference between the 45p/25p rate (I do over 10k business miles a year) and the soon to be decided 4 – 7p/mile employer payment?

    Thanks
    Dan

    Hi Dan,
    You are correct. It makes an EV really worthwhile to drive if you own it yourself and drive if for business under current AMAP rates! As you say, the difference between what your employer pays you and the AMAP rates can be reclaimed via your tax return

    Ralph Morton, Editor

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