Company car or your own: what you can actually claim

There are two entirely separate systems here, they use different numbers, and mixing them up is the most expensive routine mistake on UK mileage claims.

If the car is yours

You use Approved Mileage Allowance Payments: 45p a mile for the first 10,000 business miles in the tax year, 25p thereafter. That rate is meant to cover everything the car costs you — fuel, insurance, servicing, depreciation, the lot.

If your employer pays you less than that, you can claim tax relief on the shortfall. If they pay more, the excess is taxable.

If the car belongs to the company

Approved mileage rates do not apply. The company already owns the car and bears its costs, so there is nothing to reimburse you for except fuel. That is what Advisory Fuel Rates are for.

Advisory Fuel Rates are:

• Much lower — pence per mile figures that vary by engine size and fuel type
• Revised quarterly, so last year's figure is not this year's
• Used both for reimbursing employees for business fuel, and for employees repaying the cost of private fuel

The practical consequence: someone with a company car claiming 45p a mile is claiming something they are not entitled to, usually without realising, and often for years.

Electric company cars

There is a separate advisory electricity rate for fully electric company cars, published alongside the fuel rates and revised on the same cycle. It is not the same as the 45p rate, for the same reason: the company owns the car.

An electric car that is yours is different again — approved mileage rates apply at the normal 45p and 25p, regardless of the fact you are charging rather than filling up.

Why the record still matters

Under both systems the underlying evidence is identical: which journeys were business, when, where from and to, and how far.

The difference is only in what you multiply the miles by. Get the log right and switching between the two — a new job, a company car arriving or going away — is a change of rate rather than a change of habit.

Milesheet keeps each vehicle separate, with its own economy and running costs, so a company car and your own car do not end up in the same total.

Sources

• HMRC — Advisory fuel rates
• HMRC — Travel, mileage and fuel rates and allowances
• HMRC — Business travel mileage for employees' own vehicles

General information for UK drivers, not tax advice. Advisory Fuel Rates change quarterly — check the current table before you claim.