Calculate distance reimbursement and total mileage value from rate and number of trips.
This tool provides estimates for informational purposes only. It is not a substitute for professional advice. Individual results vary based on your inputs and assumptions, so review important decisions with a qualified professional.
freeusukcalculator.com
| Item | Value |
|---|
Whether you are claiming business mileage on your UK tax return, calculating IRS mileage reimbursements in the United States, tracking vehicle costs, or managing a company fleet, accurately recording and calculating mileage is essential. This comprehensive guide covers HMRC Approved Mileage Allowance Payments for UK drivers, IRS standard mileage rates for US taxpayers, record-keeping requirements, and how to maximise your legitimate mileage claims.
If you use your personal vehicle for business travel (not commuting to a permanent workplace), you are entitled to claim Approved Mileage Allowance Payments (AMAP) from your employer tax-free, or claim tax relief directly from HMRC if your employer pays nothing or pays less than the approved rate.
| Vehicle Type | First 10,000 Miles | Above 10,000 Miles |
|---|---|---|
| Car or van | 45p per mile | 25p per mile |
| Motorcycle | 24p per mile | 24p per mile |
| Bicycle | 20p per mile | 20p per mile |
Additionally, if you carry a fellow employee on a business journey, you can claim an extra 5p per mile per passenger. The AMAP rates have been unchanged since April 2011 for cars (45p/25p), despite significant increases in fuel and vehicle running costs, which has led to criticism from employee groups and HMRC review discussions.
If your employer pays you more than the AMAP rate, the excess is taxable as income. If your employer pays less (or nothing), you can claim the difference as tax relief — reducing your taxable income by the gap, and saving you income tax at your marginal rate (20% for basic rate, 40% for higher rate taxpayers).
Example: A higher-rate taxpayer drives 8,000 business miles per year. Employer pays nothing. HMRC claim = 8,000 x 45p = £3,600 mileage allowance relief. Tax saving = £3,600 x 40% = £1,440 per year. Claim via Self Assessment tax return or P87 form (for employees who do not submit Self Assessment).
The IRS publishes optional standard mileage rates for calculating the deductible cost of using a personal vehicle. These apply to business use, medical/moving purposes, and charitable work.
| Purpose | 2024 IRS Rate | Notes |
|---|---|---|
| Business | 67 cents per mile | Most common use; deducted as business expense |
| Medical / Moving | 21 cents per mile | Moving only for active-duty military |
| Charitable | 14 cents per mile | Set by Congress; rarely changes |
The 2024 business rate of 67 cents/mile is up from 65.5 cents in 2023 and 62.5 cents in the second half of 2022. The IRS typically adjusts the business rate annually to reflect changes in fuel prices and vehicle operating costs. Self-employed individuals and small business owners deduct business mileage on Schedule C. Employees generally cannot deduct unreimbursed business mileage since the Tax Cuts and Jobs Act 2017 suspended miscellaneous itemised deductions through 2025.
A self-employed consultant drives 15,000 business miles in 2024. Deduction = 15,000 x $0.67 = $10,050. At the 22% federal tax bracket, this saves $2,211 in federal income tax (plus state income tax savings where applicable).
HMRC can challenge mileage claims during an investigation. To be defensible, your mileage log should record: date of journey, start and end locations, business purpose, mileage (odometer readings or calculated), and running total. A contemporaneous log (recorded at the time of travel) is far more credible than records reconstructed later. Many UK businesses use apps like MileIQ, TripLog, or Everlance that automatically track trips via GPS.
The IRS requires: date of each use, destination, business purpose, and number of miles. You must also record total mileage for the year and separate business from personal use. A contemporaneous mileage log is required — the IRS will reject claims unsupported by records. Acceptable formats include paper logs, spreadsheets, or apps. Vehicle must be used more than 50% for business to use the standard mileage rate (below 50% requires actual cost method).
Automatic GPS mileage tracking is now standard practice for both UK and US frequent business drivers. Popular options:
High mileage reduces vehicle residual value. UK car dealers and valuation guides (Glass's, CAP HPI) adjust used car values based on annual mileage benchmarks. Average UK mileage is approximately 7,400 miles/year for cars. In the US, average is approximately 14,500 miles/year. A car with significantly above-average mileage will be valued lower at resale.
Depreciation cost per mile is an important component of the true cost of business travel. A vehicle bought for £20,000 that depreciates to £12,000 over 40,000 miles has depreciated at 20p per mile — which when added to fuel (15p) and maintenance (3p), gives a true cost of around 38p per mile, close to the HMRC 45p rate intended to cover all vehicle costs.
Both UK PCP (Personal Contract Purchase) and US car lease agreements specify an annual mileage allowance, with excess mileage charges applying at contract end. Typical UK PCP agreements cap mileage at 8,000–12,000 miles per year, with excess charges of 5–10p per mile. US leases typically allow 10,000–15,000 miles per year with excess charges of 15–25 cents per mile.
If you expect to exceed the agreed mileage, it is almost always cheaper to negotiate a higher mileage limit upfront (the dealer prices the higher allowance into monthly payments at a lower rate than overage charges) than to pay penalty excess mileage charges at contract end.
For UK businesses with company vehicles, HMRC provides Alternative Finance arrangements and Advisory Fuel Rates (AFRs) that are separate from AMAP rates — these apply to company car drivers claiming fuel costs only when the employer provides the vehicle. AFRs are updated quarterly by HMRC and vary by engine size and fuel type. Fleet managers use mileage tracking systems to monitor total vehicle lifecycle costs, schedule preventative maintenance, and ensure drivers claim legitimate amounts.
The HMRC Approved Mileage Allowance Payment (AMAP) rate for cars and vans is 45p per mile for the first 10,000 business miles per tax year, and 25p per mile thereafter. Motorcycles are 24p per mile (no tiered rate). These rates have been unchanged since April 2011.
If self-employed, claim business mileage on your Self Assessment tax return under vehicle costs. If employed and your employer pays nothing or less than the AMAP rate, claim the difference using form P87 (online via HMRC portal) or through Self Assessment. Keep a contemporaneous mileage log as evidence.
The 2024 IRS standard mileage rate for business use is 67 cents per mile. Medical and military moving: 21 cents per mile. Charitable: 14 cents per mile. Self-employed individuals deduct business mileage on Schedule C; employees generally cannot deduct unreimbursed mileage under current tax law.
Yes, for both UK HMRC and US IRS purposes. Records should include: date, start and end location, business purpose, and miles driven for each journey. Contemporaneous records (kept at the time of travel) are required. GPS mileage tracking apps are acceptable evidence for both HMRC and IRS.
No — in both the UK and US, travel from your home to your regular workplace (permanent workplace for HMRC, regular place of business for IRS) is not claimable as business mileage. Only travel to temporary workplaces or between different business locations qualifies. UK HMRC's 24-month rule means if you expect to attend a temporary workplace for more than 24 months, it becomes your permanent workplace and mileage is no longer claimable.
You are charged a per-mile excess fee at contract end. UK PCP excess charges typically run 5–10p per mile; US lease excess is typically 15–25 cents per mile. If you know you will exceed the limit, negotiate a higher mileage allowance at the start — it is almost always cheaper than overage charges.
Yes. HMRC AMAP rates apply to all personal vehicles used for business, including electric cars (45p/25p). HMRC also has Advisory Electric Rate (AER) for company electric car drivers — currently 9p per mile (updated December 2023), reflecting lower electricity running costs vs petrol. EV drivers claiming actual electricity costs for business travel should use the AER rather than AMAP.
UK car insurers ask for estimated annual mileage and use it in premium calculations. Higher mileage generally increases premiums as greater time on the road means more exposure to accidents. Declaring significantly lower mileage than actual use can void your insurance policy — always declare accurate annual mileage. Some UK insurers (such as By Miles and Cuvva) offer pay-per-mile or usage-based insurance, which can benefit low-mileage drivers.