Mileage Expenses and Claiming VAT on Mileage

Check out our guide to travel expenses to find out what qualifies as business travel.

Mileage Claim

For every business mile in a personal car you can claim 45p per mile for the first 10,000 miles and 25p per mile above this.

VAT Claim on Mileage

You can also claim VAT at approximately 2p-5p for every business mile undertaken in a personal vehicle.

You cannot claim the cost of petrol used in a personal car. This is because you cannot separate business-fuel from personal-fuel. This is a common mistake.

The 45p mileage allowance is calculated to cover all vehicle costs like fuel, repairs, MOTs and all other running costs. You should not claim any of these costs through your business. Instead you should claim the approved mileage rate above.

Since the mileage allowance includes fuel - and because fuel is subject to VAT - you are allowed to claim VAT that is built into the mileage allowance.

HMRC will also expect you to keep petrol receipts that match (approximately) the VAT you claim.