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Claiming VAT on Mileage

You can only claim VAT on mileage if your travels meet the criteria as an allowable expense.

Read more here to find out what qualifies as allowable business travel.

Assuming the travel is allowable, using you own vehicle means you can claim on mileage at the following rates:

  • Cars and vans – first 10,000 miles at 45 pence per mile, then 25 pence per mile thereafter

  • Motorcycles – 24 pence per mile for all mileage

  • Bikes – 20 pence per mile for all mileage

To show you an example, if you used your personal car for 15,000 miles of allowable business journeys in a tax year (6th April-5th April), this would result in an expense claim of £5,750 – this is calculated as:

  • 10,000 miles x 45 pence = £4,500

  • 5,000 miles x 25 pence = £1,250

  • Total £5,750

For more, click here to read about advisory fuel rates from HMRC.

On the above link you can see that fuel type and engine size are both factors that vary the rates.

A 1400cc or less diesel car has a fuel rate of 7 pence per mile. A mileage claim of 1,000 business miles would calculate as:

7 pence per mile x 1000 miles = £70

To work out the VAT in that £70 is calculated as:

(£70/1.2) x 0.2 = £11.67

You can only claim this £11.67 VAT back on your VAT return if your company reimburses you on for at least 7 pence per mile and you will need to keep the VAT receipts showing at least £11.67 of VAT.

Keep a record of your work journeys, including dates, mileage, reasons for travelling and destinations so the log of details is ready if HMRC wishes to investigate.

Disclaimer – this information is correct at the time of publication and is provided as general information not to be relied upon without a discussion with a suitably qualified professional

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