It’s been over four months now since HMRC quietly raised the mileage allowance from 40p to 45p per business mile. With fuel prices having doubled in the last 12 years or so, not to mention soaring insurance costs, this is a small consolation for hard pressed motorists but nevertheless a welcome move. Sadly the allowance is still only 25p per mile once you surpass the 10000 mile mark in any one tax year. I would say there are plenty of cars that would cost that in fuel alone, before any allowance is made for wear & tear and vehicle depreciation!
Many people are still only claiming 40p per mile so be sure to take advantage of the full 45p allowance that has been in place since April 6th. Of course, employers can choose to pay their staff whatever rate they like, and similarly directors can claim whatever mileage they wish from their companies. However 45p is the amount on which tax relief can be claimed, and if you claim less, the difference can be claimed as a business expense for income or corporation tax purposes.
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