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Authorised mileage rates - what is included?

Authorised mileage rates - what is included?

A client has asked whether the 45 pence HMRC authorised mileage rates includes parking costs or can these be claimed on top?


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By Luke
29th Jan 2014 16:15

Parking on top
It is for the running costs of the car, so fuel, insurance, maintenance. I would allow parking costs on top of the mileage.

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29th Jan 2014 16:21

Claim on top


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By mrme89
29th Jan 2014 16:28

What costs are covered by the mileage rate?

The mileage rate covers the costs of running and maintaining the vehicle, such as fuel, oil, servicing, repairs, insurance, vehicle excise duty and MOT. The rate also covers depreciation of the vehicle.

So if a taxpayer uses the mileage rate basis then they cannot claim any additional amount for these expenses.


What costs are not covered by the mileage rate?

The mileage rate does not cover costs that are specific to a particular journey such as tolls, congestion charges and parking fees. These will be allowable as a deduction where they are incurred solely for business purposes.

The taxpayer can claim the business proportion of the interest on a loan used to purchase the vehicle or the finance element of a hire purchase or finance lease.


Capital allowances

If a taxpayer uses the mileage rate basis then they cannot claim capital allowances in addition. This is because the payment rates already contain an element to allow for depreciation. 

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31st Jan 2014 13:07

I thought finance charges were no longer allowed, but I cannot find any reference to this now. Am i right?

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29th Jan 2014 16:59

I read on the HMRC site that in order to be eligible to apply for the HMR mileage rates that you have to be under the VAT threshold at the time the vehicle was purchased, can anyone confirm that?

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29th Jan 2014 17:14

@ Adam,

The rules were non-statutory up to 5 April 2013, and yes there was a requirement that upon the acquisition of the vehicle, the turnover had to be below the VAT registration threshold.   From 6 April 2013 however, (1) the rules are statutory and (2) the VAT threshold no longer applies.


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29th Jan 2014 18:34

Thanks all - a fast and accurate reply :-)

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31st Jan 2014 10:39

Hi there

Are the HMRC rates the only way to account for the expense of a car or are there others?

1) For instance I just keep thinking what if someone doesn't keep a record of their miles just their petrol receipts can you then apportion the fuel cost? i,e, personal vs business use

2) If you're not using HMRC rates can you apportion other motor expenses like insurance, repairs etc

3) Is there more than one legitimate way to account for the cost of cars?

4) If the company owns the car can you claim all costs in full and make the car a taxable benefit rather than only be allowed HMRC rates?


Any advice would be great





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31st Jan 2014 10:57

Lots of questions

Briefly Adam,

1. The mileage rate covers more than petrol. But, how can you accurately apportion between business and private if you don't have a record of business mileage?

2. Yes. I assume you are talking about a sole trader.

3. Yes. Business mileage and full cost with private add-back are the usual methods, but there are conceivably other convoluted ways.

4. Yes, that is the way to account for a car owned by a limited company. But the employee user will be taxed personally unless the vehicle qualifies as a pool car.

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31st Jan 2014 15:05

Finance charges still allowable for sole trader in addition to mileage rate -restricted for any private use.

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31st Jan 2014 15:25


if an emplyee is paid/claims the AMR can he also claim finance charges?

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31st Jan 2014 16:28

@ Essex accountant.  To

@ Essex accountant.  To respond to your last post, unfortunately the answer is "no".   Several years ago, employees were indeed allowed to claim for interest, but no longer so.   Indeed, I am reasonably sure that your recollection of that change a few years ago (for employees) is itself the very reason why you recalled that change (as referred to you in your first post). 



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