Mileage Allowance Relief

If you use your own car for work (for business purposes) the Inland Revenue allows you to claim tax relief on the difference between the amount paid to you per mile by your employer and the Inland Revenue rates.  Since their introduction in 2002 these are referred to as Approved Mileage Allowance Payments or AMAP for short and the tax relief you get is called Mileage Allowance Relief or MAR.

Since April 2002 a flat rate of 40p a mile is applicable for the first 10,000 annual business miles and 25p a mile for all annual business miles exceeding this.  These two figures remain the same regardless of what kind of car you drive, the size of your engine or type of fuel used.  This means that if you only receive 10p a mile when out on business, your claim for tax relief (for all business mileage up to 10,000 miles) would be for 30p a mile (40p - 10p).  This means you would get an additional 6p a mile if you are a 20% taxpayer and 12p a mile if you are a 40% taxpayer.

If you do over 10,000 miles then your claim would be for 15p a mile (25p - 10p).  This means that over and above 10,000 business miles you would get an additional 3p as a 20% taxpayer and 6p as a 40% taxpayer.  If you already receive more than 40p a mile for the first 10,000 miles and 25p a mile thereafter, the surplus will be treated as income and will be subject to tax and National Insurance Contributions.

How do I claim?

In order to get Mileage Allowance Relief you must keep records of your business trips in your own car, plus the amounts you have received from your employer.  Click on the link below to take you through to the official HMRC form to make a claim.

http://www.hmrc.gov.uk/forms/p87.pdf

Claims for previous years

If you have not made claims for tax relief in respect of your business mileage in previous years, then you may still do so, provided that you are able to produce evidence of amounts actually received from your employer.  Staffcars recommends that if you are looking to claim for previous years you speak direct to HMRC for guidance. 

In all cases, the responsibility of making claims for tax relief rests with you not your employer and submissions to the tax office must be submitted and signed by you.  It is also worth mentioning that you don't actually have to prove ownership of the car you have been using for business purposes. 

You can read more about Mileage Allowance Relief by clicking on the link to the HM Revenue and Customers website below:

 http://www.hmrc.gov.uk/manuals/eimanual/eim31330.htm