Are You Tracking Your Mileage Expenses?

Mileage tracking sounds dull and can be easily forgotten about when you’re focusing on your work, but it can make a significant impact. If you regularly use your personal vehicle for business purposes, whether you’re an employee or a business owner, you may be entitled to claim mileage expenses. Claiming these expenses can help you offset the costs associated with using your vehicle for work-related travel. So, let’s explore why tracking mileage is essential for every business, no matter its size, and how to do it.

If your employer reimburses you for the cost of your mileage, this can be reimbursed to you tax-free. Receiving tax-free reimbursements allows you to fully recover the costs incurred during your business-related travels without any additional tax liabilities.

In the event that you’re a business owner, or your employer does not provide mileage reimbursement, you can still claim tax relief for your business mileage expenses via your self-assessment return or by completing HMRC’s online form P87 if you are not required to file a self-assessment return.

Note: Regardless of whether you’re reimbursed by your employer or claiming tax relief, maintaining accurate records of your business journeys is essential. Not only does it help ensure that you receive the correct reimbursement or tax relief, but it also serves as evidence in case of any future audits or inquiries. We recommend using Xero Expenses for this.

Detailed records can include:

  • Dates and purpose of each business journey.
  • Starting and ending locations of each journey.
  • Mileage covered for each trip (both total and business-related).
  • Details of any tolls, parking fees, or other related expenses.

To streamline the process of tracking your business journeys and expenses, we recommend using a reliable expense management tool like Xero Expenses. Xero Expenses allows you to easily capture and categorize your expenses, including mileage, and store them securely in the cloud. By utilising this software, you can maintain a digital record of your business travels, making it more convenient to calculate and claim your mileage expenses.

Remember, every mile counts, so don’t overlook this opportunity to save money and receive fair compensation for your business-related travel expenses.

Free PDF download of mileage rates (June 2023)


Disclaimer: The tax rates and reliefs mentioned in this blog were correct at the time of posting (June 2023) and have not been updated for any future changes in tax law or HMRC practice. The contents of this blog have been produced as a helpful reference point and the information provided should be used as a guide only. You should discuss your specific circumstances directly with us before taking any action based on the information included in this blog.


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