The HMRC mileage rate is used to calculate the amount of money a person or business can claim as travel expenses when submitting a tax return. The rate is reviewed every year and is set by the government to ensure that the amount claimed is reasonable. As the 2023 tax year approaches, it is important to understand the current HMRC mileage rate and what changes, if any, may be implemented.
What is the Current HMRC Mileage Rate?
The current HMRC mileage rate for the 2021/22 tax year is 45p per mile for the first 10,000 miles and 25p per mile for any additional miles. This rate applies to both cars and motorcycles. The mileage rate is applied per journey, not per mile, so if you make multiple trips in the same day, the rate is the same. It is important to remember that you cannot claim more than what you actually spent on fuel.
How Does the HMRC Mileage Rate Affect me?
The HMRC mileage rate affects both individuals and businesses. Individuals can use the rate to claim back travel expenses incurred when using their own vehicle for work purposes. Similarly, businesses can claim back travel expenses for their employees who use their own vehicles for business-related travel. The rate helps to determine how much money can be claimed back and is used to calculate the amount of tax relief available.
What is the Expected HMRC Mileage Rate for 2023?
At present, the HMRC has not yet released the mileage rate for the 2023 tax year. It is expected that the rate will remain the same as the current rate for 2021/22. However, this is not guaranteed and it is possible that the rate may be amended or increased for the new tax year. It is important to keep an eye on HMRC announcements for any changes.
What are the Other Factors to Consider?
In addition to the HMRC mileage rate, there are a few other factors to consider when claiming travel expenses. Firstly, it is important to keep accurate records of your journeys. This includes the date, start and end points, distance travelled and purpose of the journey. Secondly, you must also be able to prove that the journey was necessary in order to claim the expenses. Finally, you should also be aware of any other deductions or allowances that may be available.
What Are the Benefits of Claiming Mileage?
Claiming mileage is a great way to reduce the amount of tax you have to pay. It can also help to reduce your overall costs by reducing fuel expenses, as well as the potential to save money on car maintenance. As the HMRC mileage rate is reviewed every year, it is important to stay up to date with any changes and take advantage of the rate when it is favourable.
Conclusion
The HMRC mileage rate is an important factor to consider when submitting a tax return. It is currently set at 45p per mile for the first 10,000 miles and 25p per mile for any additional miles for the 2021/22 tax year. It is expected that the rate will remain the same for the 2023 tax year, however, this is not guaranteed. Therefore, it is important to stay up to date with any changes and take advantage of the rate when it is favourable.