If you travel 50 business miles per day, but your employer only reimburses you for 18 miles per day, you can claim tax relief in respect of 32 miles per day. If your employer pays you for taking a passenger, up to 5p per mile may be paid to you on a tax- and NIC-free basis; anything over an allowance of 5p per mile is taxable and NIC-able. The passenger must also be an employee and the journey must be for business. Unlike AMAP, if your employer pays you less than 5p per mile to carry a passenger, you cannot claim any tax relief on the difference.
You can see how both of these things work in the examples Ravi and Jock. You may incur other business travel expenses, such as travel fares, meals or overnight accommodation known as subsistence , parking charges, congestion charges and road tolls. Provided these relate to business journeys, if your employer pays for any of these directly, or you pay them and get reimbursed, since 6 April , this will not be treated as a taxable benefit on you.
You then needed to make a claim for tax relief to cancel out the tax liability that arose on the expenses. If your employer does not repay you in full for such business travel expenses, you can deduct the difference from your earnings and claim tax relief. If you get a round sum travel allowance, in the first instance, you are likely to pay tax and NIC on the allowance , but you can claim tax relief to the extent that you use the allowance for business travel expenses.
This covers items like private telephone calls, laundry and newspapers. If your employer pays this, tax relief happens automatically and you do not have to claim it.
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The rules do not permit a deduction for incidental expenses incurred by the employee that are not reimbursed by the employer. Provided certain conditions are met, subsistence can be reimbursed by employers by means of a scale rate payment rather than on the basis of the actual expenditure incurred by employees in performing their duties.
Employers are free to come to a specific agreement with HMRC as to the rates. Otherwise HMRC have benchmark scale rates which all employers can use. Employers can pay less than the published rates. If an employer pays less than the published rates, employees cannot claim tax relief on the difference, but if they spend more on subsistence expenses than the amount that is reimbursed they can still claim a deduction from HMRC for the difference between what they actually spent on the expense and the amount reimbursed by their employer in the normal manner, subject to their having retained appropriate evidence.
For travel in your own car, you should keep a log of business travel to include dates, destination, purpose of trip and how many business miles you travelled — this may involve you setting your mileage counter each journey and keeping a record. For other business travel costs that you have to pay, you should keep a note of dates and trip details, and keep all receipts, for example, receipts for taxi or train fares, as proof of payments you have made, including credit card statements.
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Ravi uses his own car for business travel. His employer pays him 45p per mile for all business mileage. See example Janice below. Jock uses his own car for business travel. His employer pays him 25p per mile for all business mileage. Janice uses her own car for business travel.
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Her employer pays Janice 50p per mile for all business mileage. Her employer collects the tax and NIC due on the extra mileage payments she receives 5p per mile through payroll. Although this is aimed at employers, it will also be useful to employees. Some workers use their own cars for significant business travel and thus incur significant mileage expenses, for example care workers. You can read about some specific considerations for such workers in our dedicated section. Skip to main content.
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What if I use my own car for business purposes? Updated on 3 November Can I claim tax relief for using my own car? Back to the top How do I get tax relief if I use my own car for business travel?
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