The 6 things you need to calculate business mileage claims

Kayley

22 June 2021

Firstly, let’s establish exactly what trips count as business travel - because not all trips will qualify!

HMRC say that business travel only covers the following two types of journey:

  • journeys forming part of an employee's employment duties (such as journeys between appointments by a service engineer or to external meetings)

  • journeys related to an employee's attendance at a temporary workplace

So, if you have to visit specific locations to fulfill your job, excluding commuting to your usual place of work, this is business travel.

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If your business travel includes an overnight stay then the costs incurred for this can be claimed. You can also claim for subsistence costs incurred during business travel, for example, a meal at the airport.

When claiming business mileage, it’s important to record the 6 key details for accounting purposes.

If the time comes for a HMRC audit, they will be looking at your entire travel and expense process from start to finish. 

Here is a list of what you need to record:

  1. dates and the duration of the trip;

  2. start address;

  3. destination;

  4. miles travelled;

  5. the purpose of the trip;

  6. the amount you are claiming.

You should store these records for five years to ensure there have been no misunderstandings in the calculations and avoid unwanted fines. 

You can keep a record of business trips in a paper or online format.

Use our FREE business travel checklist below to record the required information and calculate your mileage claim.

Want to use our FREE checklist for business travel expenses? Save a copy here:

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How much can you claim for business mileage?

The amount that can be claimed depends on the type of vehicle and the distance travelled in the tax year.

The tax-free approved mileage allowance for cars and vans is 45p per mile for the first 10,000 miles in the financial year, and 25p per mile thereafter. 

Motorbikes and bicycles are slightly different, as the rate remains the same for any distance travelled within the tax year: for motorbikes, it is 24p per mile and for bicycles, it is 20p per mile.

If you bring a co-worker along on a business journey, in your own car or van and they are also going for business reasons, you can claim an extra £0.05 per mile tax-free. 

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How does Expend help?

Expend is the engine you need to automate mileage claims - taking all the work out of the process and enabling employees to submit trip reports in seconds.

Simply enter start and end addresses and select if you used a personal or company vehicle - Expend will do the rest, from creating the journey using Google Maps, calculating the distance and value, to adding the VAT.

Trips can be split into multiple legs and return journeys can be added with one tap. 

Enrich each mileage claim with fuel receipts, notes or job numbers, and sync to your accounting software packages, such as Xero or Quickbooks.

Once a mileage claim has been submitted, the expense will go through your approval process and is available to review instantly.

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Disclaimer: This is not legal, accounting, or tax advice - it's simply a guide. If you need help, check with your accountant or contact HMRC directly.  

Kayley

Head of Marketing

The driving force behind all-things-marketing, fuelled by coffee and true crime documentaries.

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