Business mileage expenses explained
It’s very simple to record, can save you tax, and contributes to an accurate set of accounts and tax return. So why do I meet so many people who don’t do it?
What is business mileage?
Any journey you make solely for the purpose of business. Examples include travelling to visit customers, suppliers, to attend work-related training events and business banking. It does not include commuting to your normal place of work. If you drop off the business post on the way home from your office, you can’t count that as a business trip.
Why record business mileage?
Keeping sufficient financial records is a legal obligation. The benefit to you is in claiming this tax free expense. Say you travel an average of 20 business miles per day, 4 days per week, 48 weeks per year. At 45p per mile that could save you £345 per year in tax at the current basic rate. So what’s stopping you?
It’s a chore
Well, I can’t argue with that. It’s not much fun, but it really doesn’t take long and quickly becomes a habit you’ll barely notice. All you need to do is keep a notebook and pen in the vehicle you use for business, or use your smartphone.
I haven’t got time
10 seconds spent jotting down the details at the end of the trip and it’s done. You can link several business trips together. So if you start at your business premises one day and travel to a customer’s premises, then go to a 2nd customer, then onto the stationers to pick up some flyers you’ve had printed, and drop off the flyers at the distribution company, that can all be recorded as one trip.
I forget
I believe you. I also know you’re doing your best to run a successful business, often under very difficult circumstances. So find a way to integrate the recording of business mileage into your daily or weekly routine.
Give me an easy solution
There are 2 options for tracking mileage. You can use the old paper and pen method, or use one of the many apps that are available now.
For each trip your paper record needs to show:
- The date
Mileage record made simple - details of where you’re going to and from
- the reason for the trip and
- the business mileage.
There are mobile apps which are appropriate for UK taxpayers Most will deal with more than just mileage. Try Concur, Eclipsecs, Webexpenses or search for an app that will record mileage.
A note on the value of your business mileage expense claims: there is more than one method of calculating mileage expenses, although there are certain restrictions. Have a chat with your accountant or contact us to find out which is best for you.