HMRC Mileage Rates 2024: Everything You Need To Know
Emily Maina
Last update on:
June 18, 2024 12:20 AM
Published on:
Do your UK workers travel for work using their own bicycles, motorbikes, or cars? If so, it's important to understand HMRC mileage rates. These rates ensure employees using personal vehicles to carry out business-related activities are compensated appropriately.
This comprehensive guide will explore what you need to know about the HMRC mileage rates in 2024. We'll take a look at the different rate amounts for various vehicle types and explain what expenses they cover.
We will also explain how using a mileage-tracking app like Timeero can help you reimburse your workers quickly and effectively.
HMRC (Her Majesty's Revenue and Customs) mileage rates are the rates set by the UK government to compensate individuals for the cost of using their own vehicles for work-related trips. They are meant to be a simple and fair method for companies and their workers to handle mileage reimbursements.
Drives to and from client meetings, travel between job sites, and any other travel deemed essential for work-related reasons are all considered reimbursable expenses. However, the cost of an employee's commute from home to work is not included. Our detailed commuting mileage reimbursement guide explains this.
The advisory mileage rates are set annually, taking into account various factors such as:
Average fuel prices
Vehicle maintenance costs
Depreciation rates
The cost of living
Some companies prefer that their employees drive company cars when performing work-related tasks. This also applies to certain self-employed people who drive business-owned cars. In such cases, employers are expected to use HMRC advisory fuel rates to pay back employees driving petrol, LPG, and diesel cars. Those operating fully electric cars should use the advisory electric rate.
What Do HMRC Mileage Rates Cover?
As mentioned previously, HMRC rates are designed to cover costs incurred while using personal vehicles for work purposes, some of which are shown in the table below.
Some travel expenses that are not covered include:
Parking fees and tolls
Congestion charges. These are considered separate business expenses and need to be claimed individually.
Accident-related repairs
Are the HMRC Business Mileage Rates for 2024 Different for Cars, Motorcycles, and Bicycles?
Depending on the type of vehicle used, the HMRC mileage rates for 2024 will vary. There is a tiered structure that applies to cars and vans, with a higher fee for the first 10,000 km driven and a lower fee imposed for any miles driven after that. However, bicycles and motorcycles maintain a fixed price regardless of mileage accrued.
Here’s a table that breaks this down into specific figures:
Please keep in mind that these are only advisory rates. Your employer might decide to compensate you at a lower rate. However, you can still claim tax relief on the difference between the lower and HMRC-approved rates.
Given this information, how does HMRC calculate mileage reimbursement for 2024?
The process is quite straightforward:
1. Track your business miles. Keep a complete record of all work trips, including the start and end locations, as well as the overall distance traveled. There are multiple ways to do this, including:
Using mileage tracking apps: Several apps are specifically designed to track business mileage. The best mileage tracking apps can automatically record your business trips using GPS, which is by far the most accurate method since it prevents human error.
Using paper-based methods: If your employer pays back mileage expenses, they can provide specific forms to record your business travel. Using a traditional paper-based mileage notebook can be an effective way to keep track of your business journeys, but it is very tedious and time-consuming. If you use this method, make sure to include essential details like the date, start and end points, mileage, and purpose of the trip.
It is best to have a clear policy that outlines the method employees should use to document mileage. Download and customize our mileage reimbursement policy template to get started.
2. Identify your vehicle type: Use the appropriate mileage rate based on your vehicle type (car, van, motorcycle, or bicycle).
3. Separate the first 10,000 miles: For cars and vans, calculate the reimbursement amount for the first 10,000 miles at 45 pence per mile. For bikes and motorcycles, use their respective rates.
4. Calculate the remaining miles: If you traveled more than 10,000 miles, calculate the reimbursement amount for the exceeding miles at the given pence per mile.
5. Add them up: Combine the total of the first 10,000 miles traveled with the exceeding mileage to get your total mileage reimbursement.
Here’s an example.
Let's say you traveled 15,000 miles for business purposes in a car:
Reimbursement for the first 10,000 miles: 10,000 miles * 45 pence/mile = £4,500
For the exceeding miles: 5,000 miles * 25 pence/mile = £1,250
Total Mileage Reimbursement: £4,500 + £1,250 = £5,750
What Are Mileage Allowance Payments?
When an employee uses their own car for work-related travel, you will pay them mileage allowance payments, or MAPs, as per the UK government. A particular amount of MAPs can be paid to your employee annually without needing to be reported to HMRC. This is known as the ‘approved amount.’
There are two conditions to consider when it comes to what you need to report and pay for HMRC mileage allowances:
When the mileage allowance exceeds the approved amount:
If you pay your employee more than the HMRC-approved mileage rate for their vehicle type and total mileage claimed, there are additional reporting and tax implications.
You must report the excess amount on a form P11D. This form details benefits and expenses provided to employees.
You also need to add the excess amount to your employee's regular pay. This will then be subject to normal income tax deductions.
When the mileage allowance stays within the approved mileage allowance amount:
If you reimburse your employee at a rate equal to or less than the HMRC-approved mileage rate for their vehicle type and total mileage claimed, then reporting and tax implications are much simpler.
There is no need to report anything to HMRC or pay additional tax on your end.
Your employees can still benefit by claiming tax relief on any unused portion of the approved mileage amount, called Mileage Allowance Relief (MAR).
You can participate in an optional scheme called the Mileage Allowance Relief Optional Reporting Scheme (MARORS) and make separate reports through it. However, to join this scheme, you'll need to contact HMRC directly.
How Can Timeero Help You With Travel Expense Management?
While the 2024 HMRC mileage rates provide a framework for claiming tax relief on business travel, accurately tracking mileage can be a challenge. Timeero, a mileage tracking app, can significantly streamline this process for both employers and employees.
Effortless Mileage Tracking for Employees
Timeero automates mileage tracking, eliminating the need for manual logs or spreadsheets. This not only reduces the risk of errors but also simplifies the recording process. The hassle of remembering to record every trip will be a thing of the past, as the app automatically tracks car mileage for you.
Timeero continues recording miles even in areas with spotty internet connections. Employees can continue logging miles and eliminate gaps in recording by using the app’s offline mileage tracking.
Timeero’s mileage tracking feature.
If an employee forgets to log their mileage, Timeero allows users to insert manual mileage entries, ensuring all business miles are accounted for, permitting employers to issue accurate reimbursement.
Enhanced Accountability and Transparency
Timeero's GPS capabilities provide valuable insights beyond tracking mileage for work. The app displays employee routes and locations, offering greater accountability through the "Who's Working" dashboard. This transparency can be valuable for managing workers who are out in the field or making sure employees are adhering to designated routes.
Timeero’s Who’s Working dashboard.
Precise Calculations for Peace of Mind
The HMRC mileage rates offer a standardized approach to mileage reimbursement, but calculating the exact amount can be tedious. Timeero provides accurate mileage calculations, which are necessary to avoiding disputes and guaranteeing fair compensation.
In your account settings, you can set your desired cost per mile and Timeero will automatically calculate the total reimbursement amount owed to employees. This capability allows you to eliminate manual calculations and reduce the risk of errors, which saves both employers and employees valuable time.
You can customize cost per mile amounts on Timeero.
Timeero's Segmented Tracking
While HMRC mileage rates focus on reimbursing travel costs, employers often seek additional insights into employee workdays. Timeero's Segmented Tracking feature addresses this need by providing valuable data on how employees spend their time.
This feature essentially breaks down the workday into manageable chunks, simplifying analysis and improving business efficiency. It offers information about locations visited, distances covered, and time spent at specific jobs or sites.
The beauty of Segmented Tracking is that it is hassle-free. Employees only need to clock in once at the start of the workday and clock out at the end of their shift. Employers can confirm that employee mileage claims are correct and not exaggerated by checking details about individual trip details. This transparency fosters trust and simplifies the reimbursement process for both parties.
Segmented Tracking on Timeero.
Accounting For Additional Expenses
While gas is frequently the largest expense encountered during business travel, other bills such as oil changes and toll fees, are frequently paid while driving. Conventional approaches necessitate that staff members maintain paper records of travel costs. However, manual purchase logs tend to contain errors, missing information, and often lead to disagreements regarding payment. Timeero offers an easier way to record business costs while traveling.
By using the app, employees can upload notes or photographs of receipts straight to their timesheets, eliminating the need to juggle manual expense reports and paper receipts. This guarantees that all expenditure information is precisely recorded and readily available for admins to examine. With a clear paper trail, admins can efficiently approve reimbursements.
Employees can attach photos and add notes to timesheets.
Optimized Travel Routes
Timeero's "Suggested Route" feature empowers employees to find the most efficient and cost-effective routes to their destinations. This feature analyzes both the actual route taken and the shortest possible route.
The comparison highlights potential inefficiencies and helps employees choose routes that minimize fuel consumption. Additionally, shorter commutes lead to more productive work hours for employees.
The app shows employees the shortest routes to take.
Reliable Reporting
Accurate record-keeping is essential for managing business travel expenses and ensuring compliance with HMRC regulations. Timeero simplifies this process by offering comprehensive and customizable reporting features.
Each employee's timesheet provides a detailed breakdown of their mileage for every shift. This readily available data resolves potential mileage discrepancies quickly and efficiently.
You can generate customized reports that capture mileage data and other critical metrics relevant to your employees. The software ensures you have access to all your mileage tracking information for a period of four years. This allows you to easily retrieve past data for tax deductions, audits, or any other reference needs.
Mileage reports on Timeero.
Timeero Integrations
Integrating Timeero with payroll software allows for effortless expense reconciliation. Managers save time as mileage data is automatically imported into your payroll system.
Simplify Reimbursement by Using HMRC Mileage Rates
Understanding the HMRC mileage rates in 2024 is crucial for both employees and their employers. By using these rates, you can guarantee fair reimbursement for business-related travel expenses and comply with tax laws.
Timeero’s mileage tracker can simplify this process for you. It automates monitoring and recording mileage, so you won’t have to worry about manual errors. Sign up for the free Timeero trial and see how much difference the app can make.
HMRC Mileage Rates 2024: FAQs
Who Sets the Mileage Reimbursement Rates?
In the UK, mileage reimbursement rates are set by HMRC. The HMRC bases this decision on a number of variables, such as the cost of living, maintenance expenses, and gasoline prices.
Can I Claim Mileage for an Electric Car?
Yes, you can claim mileage for an electric car as long as it's used for business-related trips. Workers who drive private electric cars for work are eligible to claim MAPs at the same official rate as those who drive gas or diesel cars.
Emily Maina is a tech-savvy writer with a passion for creating content. With years of experience in the industry, she is well-versed in the latest trends and developments in the tech industry. When she’s not working, Emily enjoys exploring the great outdoors or watching her favorite shows.
.webp)
.webp)
%202.svg)
