Tax relief on business mileage

If an employer pays less than the approved amount, the employee may claim tax relief on the shortfall. If the employer pays more, the excess is taxable. For 2026 to 2027 the approved car rates are 55p then 25p after 10,000 miles. The shortfall is not a refund. Relief is that shortfall multiplied by the employee's tax rate, subject to their circumstances.

A sales rep on 14,000 miles with a 45p employer rate has an approved £6,500.00 and an employer payment of £6,300.00. The shortfall is £200.00. At 20 per cent the cash reduction is £40.00. At 40 per cent it is £80.00. Those cash figures are derived from the published rates and the tax bands. They are not a second HMRC price list.

You cannot claim fuel, electricity, vehicle tax, MOTs or repairs on top of this relief. The approved rate is the running-cost figure. Passenger underpayments do not create extra relief: HMRC says there is no relief if you receive less than 5p or nothing for passengers.

HMRC says you must send copies of mileage logs that include the reason for every journey, the start postcode and the end postcode. If you claim for more than one employment, send a log for each. Keep the employer payments so the shortfall is visible. You can claim the current tax year and the 4 previous years if eligible, each year at the rate then in force.

Self Assessment users must claim on the return, not on the standalone employee relief service. PAYE-only employees use that service. Mixing the two, or claiming 55p on a year when 45p applied, is how claims bounce.

A company car fuel claim is actual fuel and electricity for business trips, not AMAP. Keep receipts. If the employer already reimbursed some of it, claim only the difference. That is a different paragraph on HMRC's vehicles-you-use-for-work page, and it is not this shortfall calculator.

On 14,000 miles at 55p for every mile, the employer pays £7,700.00 against an approved £6,500.00. The taxable excess is £1,200.00. That excess is taxable and is normally reported. It is not Mileage Allowance Relief in reverse as a claim you file. It is extra pay.

Employers who stay at or below the approved rates do not create that charge on the AMAP itself. Employers who run a generous 60p round-the-year rate on a car will create excess once miles pass 10,000, because the approved rate has dropped to 25p.

Scotland's tax bands change how much tax that excess costs the employee, not whether the excess exists. The excess is a pounds figure from the mileage arithmetic. The tax on it follows the employee's PAYE code and band.

A motorcycle uses 24p with no 10,000 mile drop, so relief is simply miles times 24p minus what the employer paid. A bicycle uses 20p the same way. A van you own uses 55p then 25p. A company car does not use this relief. Company car business fuel is actual cost or advisory fuel rates, not AMAP.

Sole traders who use simplified mileage are not claiming employee Mileage Allowance Relief. They are deducting the same published pence from profits, and they cannot also claim capital allowances on that vehicle. Employees cannot claim capital allowances on cars they use for work. MAR is the route.

Two jobs mean two logs and one 10,000 mile car threshold per tax year across the cars and vans you use, not 10,000 miles per job. HMRC's approved amount is for the tax year. Splitting jobs to reset 55p is not a published method.

That HMRC pays the shortfall in cash. It reduces tax. That 55p is the refund rate. That commuting qualifies. That a company car uses this page. That you can claim 4 years at today's 55p. Each year uses its own rate. That passenger 5p creates relief if the employer paid nothing. HMRC says it does not.

Send the logs. If a year used 55p before 6 April 2026, amend it to 45p then 25p. If commuting miles were included, take them out and recast the shortfall. If you filed Self Assessment, amend the return. If you used the employee relief service, follow HMRC's amendment route for that service. Do not file a second full claim on top of a wrong one.

A query is often about postcodes and reasons, not about the 55p figure. The rate is published. The journeys are yours to prove. A spreadsheet of monthly totals without journeys is weaker than a line-by-line log. HMRC's page says the logs must include the reason and both postcodes for every journey.

If the employer later pays a backdated mileage top-up, that payment reduces the shortfall for the year it relates to. Tell HMRC. Relief on a shortfall that has since been paid is how people are paid twice, once by the employer and once in tax, which is the thing an enquiry will unwind.

VAT on mileage is an employer question for VAT-registered businesses. This employee MAR page does not invent a VAT reclaim figure for a private car. Salary sacrifice that puts you in a company car takes you off AMAP and onto advisory fuel rates or actual fuel. You cannot claim 55p on a car you do not own.

A van with private use can be a van benefit, which is a different HMRC table, while business miles in a van you own remain AMAP. Do not mix a van benefit repayment with MAR on the same miles. Pick the regime that matches who owns the vehicle.

Disabled employees, employees with two workplaces, and employees who work from home some days still have to apply the commuting rule. Home to a permanent workplace is not qualifying. Travel from home to a temporary site can be. HMRC's travel manuals are the source for those edges. This calculator does the pence. It does not re-write the journey test.