Mileage claims for using your own car
If you use your personal car for business journeys, the company can reimburse you at HMRC's approved mileage rates without creating a personal tax charge.
The approved mileage rates
- First 10,000 business miles per year: 55p per mile
- Over 10,000 miles in the year: 25p per mile
The 55p rate for cars applies from 6 April 2026, up from 45p.
The same rates apply to petrol, diesel, hybrid, and electric vehicles. You can also claim an extra 5p per mile for each fellow employee carried on a business journey.
What counts as business mileage
Business mileage is travel from your normal place of work to a business meeting, client visit, or any other location visited for business purposes. Commuting from home to your regular workplace is not business mileage. If your home is your normal place of work, travel from home to any business meeting qualifies
How to record mileage
Keep a mileage log showing the date, start and end location, business purpose, and distance for every business journey. Total your mileage each month. We post the reimbursement as an expense in Xero against your DLA. The company deducts the full mileage cost and you receive the reimbursement tax-free.
💡 Good to know: Commuting from home to your regular place of work is not a business journey and cannot be claimed. Business journeys are trips to client meetings, suppliers, and other locations visited for business purposes. If your home is your regular place of business, travel to external meetings from home qualifies.
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