If you’re an employer and your staff use their private vehicles for business travel, you can offer them a mileage allowance. This isn’t an obligation but it really is a fantastic perk that employees always appreciate. 

The amount that you offer is up to you, with HMRC’s recommended rate being the following: 

First 10,000 miles 

Cars and vans = 45p 

Motorcycles = 24p 

Bikes = 20p 

Above 10,000 miles 

Cars and vans = 25p 

Motorcycles = 24p 

Bikes = 20p 

Employees that are reimbursed at the approved rates or under don’t have to report it to HMRC. Anything above the current rate will need to be reported by the company via a P11D form, plus the amount needs to be added to the employee’s wages so that they can pay tax on it. To keep things simple, we suggest sticking to the approved rates listed above. 

Needless to say, you have to maintain records of any mileage allowance you pay out. This should be in the form of each employee keeping an individual mileage log, outlining details of their business travel for each calendar month.