How to claim back mileage through your limited company

We often get asked how to claim back mileage through a limited company.

As a director of your own company you will also be classed as an employee. This means that you are entitled to claim back any expenses that you incur personally on behalf of the company which includes mileage for any business trips.

Remember though that you can’t claim back mileage from your home to your office as this is classed as normal commuting expenses.

We recommend keeping a log of your business mileage. The easiest way of doing this is to use a spreadsheet, although there are some apps for smart phones available that will do this for you.

Record either the start and finishing miles according to your car’s mileometer, or just remember the total miles for each trip. Alternatively, use something like Google Maps to work out the mileage.

How much you can claim

You can claim back the first 10,000 per year at 45p per mile. Any additional business miles can be claimed at 25p per mile.

The above mileage rate is split into 2 elements: fuel and wear and tear. If you are VAT registered, you can claim back the VAT on the fuel element of the mileage allowance as follows:

From 1st December 2017

Engine size Petrol Diesel LPG
1,400cc or less 11p (VAT 1.83p) 0 (VAT 0p) 7p (VAT 1.17p)
1,600cc or less 0 (VAT 0p) 9p (VAT 1.5p) 0 (VAT 0p)
1,401 – 2,000cc 14p (VAT 2.33p) 0 (VAT 0p) 9p (VAT 1.5p)
1,601 – 2,000cc 0 (VAT 0p) 11p (VAT 1.83p) 0 (VAT 0p)
Over 2,000cc 21p (VAT 3.5p) 13p (VAT 2.17p) 14p (VAT 2.33p)

 

Pre 30th November 2017

Engine size Petrol Diesel LPG
1,400cc or less 11p (VAT 1.83p) 0 (VAT 0p) 7p (VAT 1.17p)
1,600cc or less 0 (VAT 0p) 9p (VAT 1.5p) 0 (VAT 0p)
1,401 – 2,000cc 13p (VAT 2.17p) 0 (VAT 0p) 8p (VAT 1.33p)
1,601 – 2,000cc 0 (VAT 0p) 11p (VAT 1.83p) 0 (VAT 0p)
Over 2,000cc 21p (VAT 3.5p) 12p (VAT 2.0p) 13p (VAT 2.17p)

How often you can make mileage claims

You can make your mileage claim on a monthly or periodic basis. It can be reimbursed either by the company paying the exact amount of money to your personal account from the business account or by increasing your director’s loan account. We will cover the directors’ loan account in a future blog.

If you have any questions, or need further information, please get in touch.

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