For many professionals in the UK, the car is more than just personal transport; it’s a vital tool for the job. Whether you’re a district nurse visiting patients, a sales representative covering a region, or a tradesperson travelling between sites, you likely cover hundreds of work-related miles every month.
What you might not realise is that you could be owed money back from HM Revenue & Customs (HMRC) for the costs of using your personal vehicle for work. The system is designed to be fair, allowing you to claim tax relief on the money you spend doing your job. But it’s up to you to claim it.
How Does the Tax Relief for Driving Work?
You cannot claim tax relief on your regular commute from home to a permanent workplace. However, you can claim for business mileage—that is, journeys you make in the course of your employment once you’ve arrived at a permanent workplace. This includes:
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Travel between different workplaces (e.g., from your office to a client’s site).
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Travel to a temporary workplace (a location you attend for less than 24 months).
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Site visits, client meetings, and other business-related journeys.
There are two main ways to receive tax relief, depending on how your employer handles expenses.
1. If Your Employer Does Not Reimburse You
This is the most common scenario for claiming tax relief directly from HMRC. If you use your own car for work and your employer does not pay you anything for it, you are entitled to claim tax relief on the approved mileage rates.
HMRC sets Approved Mileage Allowance Payments (AMAP) rates. These are the tax-free amounts you can claim per mile:
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Cars and Vans: 45p per mile for the first 10,000 business miles in a tax year.
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Each additional mile over 10,000: 25p per mile.
How the claim works:
Let’s say you drove 12,000 business miles in a tax year and received no payment from your employer.
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Your claim would be: (10,000 miles x £0.45) + (2,000 miles x £0.25) = £4,500 + £500 = £5,000.
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You get tax relief on this £5,000. Since tax relief is given at your income tax rate, a basic rate (20%) taxpayer would receive £1,000 back (£5,000 x 20%). A higher rate (40%) taxpayer would receive £2,000 back.
2. If Your Employer Does Reimburse You, But It’s Less Than the AMAP Rate
Many companies reimburse their employees for mileage, but sometimes their internal rate is lower than the HMRC-approved amount.
For example, if your employer pays you 30p per mile, you can claim tax relief on the difference between what they paid and the HMRC rate.
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For the first 10,000 miles, the difference is 15p (45p – 30p).
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You can claim tax relief on that 15p per mile.
What About Other Vehicle Costs?
The AMAP rates are designed to be a simple, all-inclusive payment that covers the cost of fuel, insurance, road tax, maintenance, and depreciation. You cannot claim for these items separately if you are using the mileage allowance method.
However, if you use a company car but pay for the fuel yourself for business trips, you may be able to claim relief on the fuel costs. The rules are more complex, and it often requires detailed records.
The Golden Rule: Keep Meticulous Records
To make a successful claim, you need evidence. HMRC may ask to see your records, so it’s essential to be diligent. Maintain a detailed mileage log that includes:
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The date of each journey.
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The purpose of the journey (e.g., “Meeting with client X at [address]”).
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The start and end locations.
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The total mileage for each trip.
A simple notebook in your glove compartment or a mileage-tracking app on your phone can suffice.
Don’t Leave Money on the Table
Claiming tax relief for driving for work is not a loophole; it’s a legitimate entitlement designed to ensure you aren’t out of pocket for costs incurred while doing your job. The process can seem administrative, but the average claim is well worth the effort.
You can backdate your claim for up to four previous tax years, meaning you could be in line for a significant lump sum refund if you’ve never claimed before.
Services like SAVY can remove the hassle. They specialise in identifying what you can claim for and handling the entire process with HMRC on your behalf, ensuring you get every penny you’re owed, stress-free.
If you drive for work, it’s time to check your eligibility. Your daily journeys could be worth more than you think.
