UK Tax Relief Guide · 2026
How do I claim UK mileage tax relief?
Who can claim
UK PAYE employees who use personal car/vehicle for business travel (not commute) AND receive less than HMRC approved rates from employer. Common scenarios: employer pays 25p/mile flat (you can claim relief on 20p × first 10k miles); employer pays nothing (full 45p × first 10k miles claimable); employer pays full HMRC rate (no claim). NOT eligible: ordinary commute; company car; employer-paid travel.
How much you can save
Calculation: (HMRC rate − employer-paid rate) × business miles × tax rate. Example: 5,000 business miles/year, employer pays 25p/mile, you're higher-rate taxpayer: (45p − 25p) × 5,000 = £1,000 allowable expense × 40% = £400 tax saving/year. Backdate 4 years: £1,600. For nothing-paid + 10k miles + higher rate: 45p × 10,000 = £4,500 × 40% = £1,800/year tax saving.
How to claim
1) RECORD business mileage carefully — log: date, journey, purpose, miles. Apps like MileIQ, TripLog. 2) CALCULATE difference between HMRC rate and employer rate × miles. 3) CLAIM via Self Assessment 'employment expenses' OR direct HMRC claim if no Self Assessment needed. 4) KEEP records 6+ years (HMRC may audit). 5) BACKDATE up to 4 years if eligible. 6) ANNUAL claim each year as required.
Common mistakes
1) Not knowing about it — particularly common for sales reps, healthcare community workers, technicians. 2) Including commute miles (NOT business). 3) Inadequate mileage records — must be detailed enough for HMRC audit. 4) Using wrong HMRC rate (45p first 10k, then 25p; many people use 45p throughout — wrong). 5) Combining business + personal trips without splitting. 6) Forgetting 4-year backdate window.
Worked example
Mark (sales engineer, higher-rate taxpayer) drives ~12,000 business miles/year. Employer pays 30p/mile flat. He calculated: first 10,000 miles: (45p−30p)×10,000 = £1,500; next 2,000: (25p−30p) = NEGATIVE — capped at zero (he can't lose). Total claimable: £1,500/year × 40% = £600/year tax relief. Backdated 4 years: £2,400. Ongoing £600/year for as long as same role. Mileage app cost: £30/year (negligible).
Recruiter pro tip
The 45p first-10,000-miles HMRC rate is one of the most generous business expense allowances and most underclaimed. Even if your employer pays you something, the gap is often substantial. Sales reps, healthcare community workers, mobile engineers, plumbers, and trade workers should all be calculating this annually. The 4-year backdate is particularly valuable — typical claim recovers £1,000-£3,000 retrospectively. Use a mileage tracking app from now to make future claims easy.
Important: Tax rates and rules change each tax year. Verify current rates at gov.uk before acting. NEVER use third-party 'tax refund' services taking commission — claims are free at gov.uk. For complex circumstances, consult a qualified UK accountant or tax advisor (chartered tax advisor — CTA). This guide is general information only, not tax advice.
Related tax relief guides
Can I claim UK tax relief for uniforms and work clothes?
Yes — UK PAYE employees can claim tax relief for cleaning, repairing, or replacing uniforms or specialist work…
How do I claim a UK tax refund online?
UK tax refunds can be claimed several ways: (1) Self Assessment — for those who file annual returns; (2) PAYE …
When are UK Self Assessment deadlines for 2026-27?
UK Self Assessment deadlines: register by 5 October following tax year end (so 5 Oct 2026 for 2025-26 tax year…
Related across UK Rights & Guides