Travel in own vehicle

Where a director or employee uses their own vehicle for business travel they can be reimbursed by the business at the following rates:

Where the director/employee is paid above these rates, a benefit in kind will need to be reported to HMRC and tax/NIC will need to be paid.

In general it is advised to stick to these mileage rates to avoid any additional reporting and taxes. The rates are intended to cover the costs of petrol and general wear and tear to the vehicle. 

It is important that the business does not pay for fuel in a director/employees own vehicle because:

- The separation between personal and business use for the fuel cannot easily be made, thereby creating a risk that HMRC would seek to tax the individual on the benefit received.

- The calculated benefit from a business paying for an employees personal fuel is disproportionately high; generally it is not worth claiming and paying tax on the benefit of having fuel paid by the business.