Introduction
Mileage Allowance Relief (MAR) is claimable by any self-employed individual or employee who is claiming work-related mileage expenses in the United Kingdom. A portion of your business miles driven in your car can be claimed back as a tax deduction under MAR if your employer pays a lower mileage allowance or no mileage allowance at all according to the approved HMRC rates.
What is Mileage Allowance Relief?
Mileage Allowance Relief is an allowance available for the employees and self-employed against whom they personally use their cars for any business purpose.
- If your employer reimburses you at less than the HMRC approved rates, any excess of the latter can be claimed as tax relief.
- If your employer makes no contribution to your business-related mileage, you can claim the entire approved rate as tax relief.
- A deduction for business mileage can be allowed to self-employed earners.
MAR isn’t a cash payment from HMRC. Instead, it cuts down your taxable income, which helps shrink your tax bill.