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Company Car Mileage Rates & Refunds

Last Reviewed: September 2022

If your employer gives you the use of a car or van as part of your contract, HMRC looks at it differently from a personal vehicle. Depending on your terms of employment, you might also get some free fuel for private use. Either way, the type and amount of travel you do in your company car can make a big difference to your tax situation. If you’re not claiming tax relief for your work travel expenses, you’re leaving your own cash in the taxman’s hands. Use our mileage tax relief calculator to your next tax rebate on the road.

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HMRC Fuel RatesHow much can I claim per mile for a company car?

When you’re using your own set of wheels for work, the mileage you’re doing can put money back in your pocket in the form of a yearly tax refund.

The basic rules as of 2021/22 say you can claim back:

45p per mile for the first 10,000 miles you travel for work in a year.
After that, the rate drops to 25p.

These are called Approved Mileage Allowance Payments (AMAP). If your employer isn’t stumping up the full amount to reimburse you, you can claim back the difference from HMRC.

When you’ve got a company car, you can’t use the AMAP rates to claim back tax. This is basically because those rates are supposed to cover more than just your fuel costs. The taxman assumes you’re also paying for the vehicle’s routine maintenance and so on. With a company car, what you can claim is based on just the fuel you’re buying. This is called the Advisory Fuel Rate, and it’s calculated on the size of your engine and the type of fuel you use.

The Advisory Fuel Rates from the 1st September 2022 look like this:

Engine size (CC)	Petrol - amount per mile	LPG - amount per mile
1400cc or less	15p	9p
1401cc to 2000cc	18p	11p
Over 2000	27p	17p

Engine Size (CC)	Diesel - amount per mile
1600cc or less	14p
1601cc to 2000cc	17p
Over 2000cc	22p

With hybrid cars, you can either use the petrol or diesel rate. Fully electric cards get an Advisory Fuel Rate of 5p per mile.

Electric carsWhat mileage rate can I claim for an electric company car?

Claiming mileage for electric cars is a little different from vehicles that run on petrol or diesel. Instead of the standard Advisory Fuel Rate, electric company cars have their own system called the Advisory Electricity Rate (AER). Because electric cars are generally cheaper to run, the AER is set at a flat 5p per mile. If your company car's a hybrid, however, you'll still use the standard rates for petrol and diesel cars. There's no special rate for hybrids.

One thing to keep in mind is that, if you're charging your electric company car at home, it'll probably be difficult to keep the energy bills you're racking up from that separate from your general household electricity use. That could lead to some headaches if you were trying to claim a tax rebate for your recharging costs as a work expense. Using the AER of 5p per mile is probably the easiest way to claim back the tax you're owed for your business travel.

Company CarsHow does a company car count for my tax?

Getting a company car from your boss is considered a “benefit in kind” by HMRC. Generally speaking, a benefit in kind is any little perk or extra your employer offers on top of your basic salary. The rules around this are a bit fiddly in places, but essentially these kinds of extras come with some extra tax to pay. You’ll usually be charged this tax at the normal rate you pay, but there can be some exceptions, so have a chat with RIFT to make sure you don’t end up paying too much.

Not every company car is the same, so the actual amount of tax you end up paying will depend on things like the vehicle’s list price on the day before it was first registered. Cars with low CO2 emissions will have this value dropped a bit so you pay less. You’ll also pay less if you’re chipping anything in toward the car’s cost, or if you only get to use it some of the time. Hybrids with CO2 emissions of 1-50g/km have their values set by their zero-emission mileage figure (or “electric range”). This just means the distance it can go on electric power before needing a recharge.

Part-time use of a company car will also bring down the tax you pay, since you’re only charged for the part of the year when you’re using it.

Keep in mind that any free or subsidised fuel you’re getting from your employer can also count as a benefit in kind. That’ll mean a little extra tax to pay. HMRC will usually handle all of this by tweaking your tax code to take the vehicle and fuel into account. It’s easy to get tripped up by tax code changes, though, so check with RIFT to make sure you keep your footing.

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Mileage RefundsWhat if my employer gives me extra benefits to use my own car? Am I taxed on these?

There’s a good chance that any little perks you get when using your own vehicle for work will count as benefits in kind. If you’re getting a mileage allowance, for instance, it’ll count against the amount of tax you can claim back through the AMAP system.

Suppose you get a bonus for giving a lift to other employees. HMRC values this at an extra 5p per mile for each extra passenger. The travel still has to be a work journey for them, of course. You can’t just load up the car with random people and expect a load of extra tax relief for carrying them.

So, to make a long story short, anything you’re getting from your boss for using your own car, other than a basic mileage allowance, will tend to count as a taxable benefit.

Mileage RefundsHow are work vans taxed?

If you’re getting any private use out of a work van, then the chances are you’ll be taxed for it as a benefit in kind. As of 2020, a company van’s value is set at £3,430 – but this will come down if you can’t use it for 30 days on the trot. The taxable value also comes down if you pay anything for private use of the van or if other employees use it. If you’re sharing use of it, for instance, the value is divided by the number of employees using it.

As for fuel used for private journeys HMRC has set a standard value of £655. Again though, that can come down for a few reasons – like if you pay for the fuel yourself or can’t use the van for 30 days straight.

Vans with zero emissions have their values calculated at 60% of the normal figure, so as of 2020 they count as being worth £2,058.

Mileage Calculator

Mileage RefundsI have access to a pool car. Am I still taxed on it?

When you’re sharing work use of a pool car, there are separate rules for it. To qualify as a pool car, you generally won’t be able to keep it at home, and you’ll be sharing access to it with other employees. Pool cars like won’t count as a benefit in kind, so you won’t be taxed on your use of it. If you’re getting any private use of the car, though, you’ll probably find yourself being taxed on it – although the amount may be lower since you’re sharing access with others. The same goes for any subsidised or free fuel you’re getting.

Keep in mind that not every shared-access vehicle will automatically count as a pool car. Get in touch with RIFT if you’re not sure where you stand.

Mileage Calculator

Travel arrangements in ConstructionI work Construction and travel a lot - can I claim a mileage refund?

Off course! When you work in construction, a typical year can put a lot of miles under your wheels and takes a lot of cash out of your pocket. Check our mileage calculator to get an instant estimate of how much of a tax refund you may be able to claim.

We've even put together a quick guide on construction travel tax refunds and how to make the most of the them. Click the link below.

Travel arrangements in construction

Who are RIFT?The UK's leading tax rebate experts

The UK’s tax laws are a maze of deadlines, exemptions and penalties. RIFT’s tax refund specialists are the best in the business at handling the complex details of rebate claims. From calculating mileage and other tricky expenses to protecting your refund from HMRC enquiries, RIFT keeps online tax rebate claims simple, stress-free and safe.

We've claimed back over £281 million in for over 160,000 people in the form of military tax refunds, construction tax refunds and more like you since 1999. We look after every claim on an individual basis so we can do what is best for you.

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Company Car Mileage Rates & Refunds​