Running a business means lots of little costs that add up. One of the biggest hidden expenses? Travel. Whether it’s visiting clients, delivering products, or networking, every mile you drive can chip away at your profit.
The good news is — HMRC allows you to claim Mileage Allowance Relief to cover those costs. And trust me, many small business owners don’t even know they’re entitled to it! Let’s break it down in plain English.
What is Mileage Allowance Relief?
Mileage Allowance Relief is a way to claim back the cost of using your personal vehicle for business journeys. Instead of claiming petrol receipts or car insurance separately, HMRC gives you a set rate per mile.
Current HMRC Mileage Rates (2025)
- Cars and vans: 45p per mile for the first 10,000 miles, then 25p per mile
- Motorcycles: 24p per mile
- Bicycles: 20p per mile
Example:
If you drove 5,000 miles for business in a tax year → you can claim:
5,000 × 45p = £2,250 tax-free allowance
What Doesn’t Count
• Personal trips (e.g., school runs, shopping).
• Commuting to your regular workplace (that’s not “business travel”).
• Journeys already reimbursed by your employer
How to Keep Records
HMRC expects accurate logs. Don’t panic — this can be simple:
• Date of trip
• Where you went
• Business reason
• Miles travelled
Pro tip: Use a mileage tracking app or keep a small logbook in your car.
Final Thoughts
Every pound counts in business. By claiming mileage relief, you reduce your taxable profit and keep more money in your pocket.
At KAF Advisory, we make sure our clients never leave money on the road.
Need help making sense of your business expenses? Get in touch with us today — clarity brings confidence.