2024-25 mileage rates in the U.K.

As the new tax year begins, it's important to familiarize yourself with the mileage rates and calculations applicable to your business-related driving in the United Kingdom. In the 2024-25 tax year, HM Revenue and Customs (HMRC) has set the following mileage rates:

1. For cars and vans:
   • 45p for the first 10,000 business miles.
   • 25p for each business mile after the threshold of 10,000 miles.
2. For motorcycles and bicycles:
   • 24p per business mile for motorcycles.
   • 20p per business mile for bicycles.

Trips that do not qualify as business trips include commuting from your home to your workplace and personal trips that are clearly not for business purposes. Additionally, the mileage rates do not cover road, bridge, tunnel tolls, parking fees, congestion charges, or any fines or penalties related to speeding, parking, or other road offenses.

Calculation of reimbursement or deduction

To understand how the calculation works, consider the following example: Let's say you have traveled a total of 1,000 miles for business-related purposes during the tax year. For the 2024-25 tax year in the UK, the mileage rate is 45p per mile for the first 10,000 business miles, and 25p per mile for each business mile beyond the threshold.

To calculate your eligible reimbursement or deduction, you can use the following formula:

Total reimbursement or deduction = (Total business miles x 45p) + (Additional business miles x 25p)

In this example, your calculation would be:

Total reimbursement or deduction = (1,000 miles x 45p) + (0 miles x 25p) = £450

This means that your eligible reimbursement or deduction for the tax year would be £450 based on the mileage rates provided by HMRC.

Record-Keeping and documentation

Remember, maintaining accurate records and documentation is essential when claiming mileage reimbursement or deductions. This includes keeping track of your business-related mileage, documenting the purpose of each trip, and retaining receipts for any additional expenses.

By understanding the mileage rates and guidelines set by the HMRC, you can effectively navigate the process of claiming mileage reimbursement or deductions in the 2024-25 tax year. Should you require further assistance or have specific questions related to your circumstances, consider consulting a tax professional or contacting the HMRC directly for personalized guidance.