Your Mileage Funding Hub Questions Answered

Mileage allowance is the tax-free amount you can claim for business travel using your personal vehicle. The mileage allowance covers fuel, maintenance, insurance, and wear and tear. HMRC sets approved mileage rates that let you claim 45p per mile for the first 10,000 business miles annually, then 25p per mile thereafter, ensuring fair compensation without creating a taxable benefit.

HMRC mileage rates for cars and vans are 45 pence per mile for the first 10,000 business miles in a tax year, then 25 pence per mile beyond that. Motorcycles qualify for 24p per mile, while bicycles receive 20p per mile. These approved mileage rates UK guidelines cover all vehicle running costs and are updated periodically to reflect changing fuel prices and vehicle maintenance expenses.

Approved mileage rates are designed to cover all vehicle expenses, not just fuel. While actual fuel costs vary with prices and vehicle efficiency, the approved rates account for insurance, servicing, MOT, depreciation, and repairs. This simplified approach means you don't need to track individual expenses—the standard rate covers everything, making the mileage claim process much more straightforward for business mileage expenses.

Advisory fuel rates apply specifically to company cars when employees reimburse their employer for private fuel or when employers reimburse fuel for business trips. Updated quarterly by HMRC, these rates vary by engine size and fuel type. Unlike approved mileage rates, advisory fuel rates cover only fuel costs, not other vehicle expenses, making them appropriate for company car fuel benefit calculations at mileagefundinghub.