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Where to Enter Mileage Allowance Relief on Self Assessment?

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Where to Enter Mileage Allowance Relief on Self Assessment

A Comprehensive Guide to Where to Enter Mileage Allowance Relief on Self Assessment in the UK

Navigating the intricacies of the UK tax system can be a daunting task, especially when it comes to claiming expenses and reliefs. One such relief that many self-employed individuals and employees may be eligible for is Mileage Allowance Relief (MAR). This blog will provide a detailed guide on what Mileage Allowance Relief is, who can claim it, and most importantly, where to enter Mileage Allowance Relief on your Self Assessment tax return in the UK.

Understanding Mileage Allowance Relief (MAR)

What is Mileage Allowance Relief?

Mileage Allowance Relief (MAR) is a tax relief available to employees and self-employed individuals who use their personal vehicles for business purposes. If your employer pays you less than the approved mileage rates set by HM Revenue and Customs (HMRC), you can claim MAR to cover the difference. This relief ensures that you are not out of pocket for using your own vehicle for work-related travel.

Approved Mileage Allowance Payments (AMAPs)

HMRC sets Approved Mileage Allowance Payments (AMAPs), which are the maximum amounts that an employer can pay an employee for business travel using their personal vehicle without incurring a tax liability. As of the 2023/24 tax year, the AMAP rates are:

  • Cars and Vans: 45p per mile for the first 10,000 business miles and 25p per mile thereafter.
  • Motorcycles: 24p per mile.
  • Bicycles: 20p per mile.

If your employer pays you less than these rates, you can claim MAR for the difference.

Who Can Claim Mileage Allowance Relief?

MAR is available to:

  1. Employees: If you are an employee and use your personal vehicle for business travel, and your employer either does not reimburse you or pays you less than the AMAP rates, you can claim MAR.
  2. Self-Employed Individuals: If you are self-employed and use your personal vehicle for business purposes, you can claim MAR as part of your business expenses.

It’s important to note that MAR is not available if your employer pays you the full AMAP rates or more, as you would not have incurred any additional costs.

Keeping Records for Mileage Allowance Relief

Before diving into where to enter MAR on your Self Assessment, it’s crucial to understand the importance of keeping accurate records. HMRC may request evidence to support your claim, so maintaining detailed records is essential.

What Records Should You Keep?

  1. Mileage Logs: Keep a log of all business miles traveled. This should include the date, destination, purpose of the trip, and the number of miles traveled.
  2. Receipts and Invoices: Retain receipts for any vehicle-related expenses, such as fuel, maintenance, and insurance.
  3. Employer Reimbursements: If your employer reimburses you for mileage, keep a record of the amounts paid and the dates.

How Long Should You Keep Records?

HMRC requires you to keep records for at least five years after the 31 January submission deadline of the relevant tax year. For example, if you submitted your 2022/23 tax return by 31 January 2024, you should keep your records until at least 31 January 2029.

Where to Enter Mileage Allowance Relief on Self Assessment

Now that we’ve covered the basics of MAR and the importance of record-keeping, let’s delve into where to enter Mileage Allowance Relief on your Self Assessment tax return.

Step 1: Determine Your Employment Status

The section of your Self Assessment where you enter MAR depends on your employment status:

  1. Employees: If you are an employee, you will enter MAR under the “Employment” section of your Self Assessment.
  2. Self-Employed Individuals: If you are self-employed, you will enter MAR as part of your business expenses in the “Self-Employment” section.

Step 2: Logging into Your HMRC Online Account

To complete your Self Assessment, you need to log into your HMRC online account. If you haven’t already registered for Self Assessment, you will need to do so and obtain your Unique Taxpayer Reference (UTR) number.

Step 3: Navigating to the Relevant Section

For Employees

  1. Log in to Your HMRC Account: Access your HMRC online account and navigate to the Self Assessment section.
  2. Select the Tax Year: Choose the tax year for which you are submitting your return.
  3. Go to the Employment Section: In the “Employment” section, you will find a subsection for “Employment Expenses.”
  4. Enter Mileage Allowance Relief: Within the “Employment Expenses” subsection, you will see a field for “Mileage Allowance Relief.” Enter the amount you are claiming here.

For Self-Employed Individuals

  1. Log in to Your HMRC Account: Access your HMRC online account and navigate to the Self Assessment section.
  2. Select the Tax Year: Choose the tax year for which you are submitting your return.
  3. Go to the Self-Employment Section: In the “Self-Employment” section, you will find a subsection for “Business Expenses.”
  4. Enter Mileage Allowance Relief: Within the “Business Expenses” subsection, you will see a field for “Vehicle and Travel Expenses.” Enter your MAR claim here, along with any other vehicle-related expenses.

Step 4: Calculating Your Mileage Allowance Relief

To ensure you claim the correct amount of MAR, you need to calculate the difference between what your employer paid you and the AMAP rates.

Example Calculation

Let’s say you traveled 8,000 business miles in your car during the tax year, and your employer reimbursed you at a rate of 30p per mile.

  1. Calculate the AMAP Amount:
    • First 10,000 miles: 45p per mile.
    • For 8,000 miles: 8,000 x £0.45 = £3,600.
  2. Calculate the Amount Reimbursed by Your Employer:
    • 8,000 miles x £0.30 = £2,400.
  3. Calculate the MAR Claim:
    • £3,600 (AMAP) – £2,400 (Employer Reimbursement) = £1,200.

In this example, you would claim £1,200 as Mileage Allowance Relief.

Step 5: Submitting Your Self Assessment

Once you have entered all the necessary information, including your MAR claim, review your Self Assessment to ensure all details are accurate. After verifying your entries, submit your return to HMRC.

Common Mistakes to Avoid When Claiming Mileage Allowance Relief

Claiming MAR can be straightforward if you follow the correct steps, but there are common mistakes that taxpayers make. Here are some pitfalls to avoid:

Incorrect Mileage Records

Failing to keep accurate mileage logs can lead to errors in your MAR claim. Ensure that your mileage records are detailed and up-to-date.

Claiming for Non-Business Miles

Only business miles are eligible for MAR. Personal trips, such as commuting to and from your regular place of work, are not eligible. Make sure you only include miles traveled for business purposes.

Overlooking Other Vehicle Expenses

While MAR covers the difference between what your employer pays and the AMAP rates, you may also be eligible to claim other vehicle-related expenses, such as fuel, maintenance, and insurance. Ensure you include all eligible expenses in your claim.

Missing the Deadline

The deadline for submitting your Self Assessment tax return is 31 January following the end of the tax year. Missing this deadline can result in penalties and interest charges. Make sure you submit your return on time.

Not Seeking Professional Advice

If you’re unsure about any aspect of your MAR claim or Self Assessment, it’s advisable to seek professional advice from a tax advisor or accountant. They can help ensure that your claim is accurate and compliant with HMRC regulations.

Additional Considerations for Mileage Allowance Relief

Changes in Employment Status

If you change jobs or become self-employed during the tax year, your eligibility for MAR may change. Ensure that you update your records and adjust your MAR claim accordingly.

Using Multiple Vehicles

If you use more than one vehicle for business purposes, you can claim MAR for each vehicle. However, you must keep separate mileage logs for each vehicle and calculate the MAR for each one individually.

Company Cars and Vans

If you have a company car or van, you may not be eligible for MAR, as your employer is likely covering the costs of business travel. However, if you use your personal vehicle in addition to a company vehicle, you may still be able to claim MAR for the personal vehicle.

Electric and Hybrid Vehicles

If you drive an electric or hybrid vehicle, the AMAP rates are the same as for petrol or diesel vehicles. However, you may also be eligible for additional tax reliefs or incentives for using environmentally friendly vehicles. Check with HMRC or a tax advisor for more information.

Conclusion

Mileage Allowance Relief is a valuable tax relief that can help offset the costs of using your personal vehicle for business purposes. By understanding what MAR is, who can claim it, and where to enter it on your Self Assessment tax return, you can ensure that you are not missing out on this important benefit.

Remember to keep accurate records, calculate your MAR claim correctly, and submit your Self Assessment on time to avoid any penalties. If you’re ever in doubt, don’t hesitate to seek professional advice to ensure that your claim is accurate and compliant with HMRC regulations.

By following the steps outlined in this guide, you can confidently navigate the process of claiming Mileage Allowance Relief and make the most of your tax return. Safe travels and happy claiming!