Is it really worth tracking my mileage as a business expense?

Mileage blog header

From the top, let’s make one thing very clear – if you do not have a business vehicle (one that is SOLELY for business use or OWNED by your company), then you can’t put through your costs such as fuel, insurance, repairs etc.

In this case, we’re interested in the mileage you’ve covered in your personal vehicle.

What can I claim?

So, let’s say you have a personal vehicle which you use for business trips from time to time. If this vehicle is petrol or diesel, then you can claim 45 pence per mile as a business expense.

This amount is higher than the cost of the fuel alone as it’s designed to cover wear & tear and other vehicle costs.

There are different claimable rates for electric or hybrid vehicles, motorbikes & bicycles, which we won’t go into here… but the principle remains the same – it IS worth tracking your mileage!

The one caveat here is that if you are travelling to and from the permanent place of business, such as the office, or the store if you run a retail business etc, then this is not allowable. But, any other trips are allowable! So we’re talking visiting clients, attending networking events, popping to the Post Office, travelling to training and all manner of other things!

For info on which option is best for you, see our following blogs:

Should you buy a company car, or claim the mileage from a personal car?

Should I buy an Electric Company Car?


Okay so what is the benefit here?

Is it really worth tracking every trip?

Well, the benefit is actually two-fold! It affects both you & your personal taxes, and the business’ (if you’re a Sole Trader, you and the business are one and the same, so it’s just one BIG benefit!)

1) The mileage expense that you claim through your business shows as money that the business owes back to you, as if it needs to pay you for an expense that you purchased on its behalf. This means that this money can be paid to you, tax-free.

2) Having an additional expense lowers your company’s profit, meaning less Corporation Tax (or self-assessment tax) to pay!

Basically, this is just a really easy way to get more out of your business and pay less tax!


How should I track my mileage?

We would suggest keeping track in a spreadsheet with the date and distance, or, if you do a lot of trips, there are various apps you can use.

We like MileIQ, but there are plenty out there to choose from so take a look online and find one that suits you.

If you’re looking to work with an accountant who knows all the tips and tricks to save you tax, please fill in our Quick Questionnaire and have a chat with us!