How Do I Record Mileage and Travel Expenses

What Counts as Business Travel

HMRC defines business travel as journeys you make wholly and exclusively for work purposes. This can include:

• Travel between different work locations.

• Visits to clients, suppliers, or training events.

• Business trips to attend court hearings, meetings, or conferences.

You cannot claim for travel that is primarily personal, such as commuting from home to your regular workplace. However, if you travel to a temporary workplace for a limited time, those miles may be claimable.

What You Can Claim

The way you claim travel expenses depends on how your vehicle is owned and how you are paid.

1. Mileage Allowance
If you use your own personal car, you can claim mileage at HMRC’s approved rates:

• 45p per mile for the first 10,000 miles in a tax year.

• 25p per mile for any additional miles.

These rates cover fuel, insurance, maintenance, and general wear and tear, so you cannot claim those costs separately.

2. Actual Costs
If the vehicle is owned or leased by your business, you can instead claim actual costs such as fuel, servicing, repairs, and insurance. You must keep detailed receipts and business mileage records to calculate the business-use percentage.

3. Public Transport and Other Travel
You can also claim reasonable costs for:

• Train, bus, and taxi fares for business journeys.

• Parking fees and tolls.

• Accommodation and meals during overnight stays.

Personal travel and fines, such as speeding tickets, are never allowable.

How to Record Mileage

HMRC expects you to keep detailed and accurate mileage records. These can be kept in a notebook, spreadsheet, or mileage tracking app. Each record should include:

• The date of travel.

• The start and end locations.

• The total miles driven.

• The purpose of the trip.

• The vehicle used (if you have more than one).

An example entry might look like this:

Date Journey Purpose Miles

12/04/2024 Office to client meeting in Leeds Client consultation 84

Digital mileage tracking tools such as MileIQ, Tripcatcher, or QuickBooks can automatically record and log your business journeys using GPS. These tools help ensure accuracy and save time.

Recording Other Travel Expenses

For expenses such as train tickets, fuel, or hotels, you should:

• Keep all receipts and invoices.

• Record each expense in your accounting software or logbook.

• Note the date, reason for travel, and destination.

For employees, your employer may require an expense claim form with receipts attached. For self-employed individuals, these records are used to complete your Self Assessment tax return.

It is also good practice to review your expenses monthly and reconcile them with your bank or credit card statements. This helps catch errors and keeps your records organised.

How Long to Keep Records

HMRC requires you to keep travel and mileage records for at least five years after the submission deadline for the tax year they relate to. For companies, it is six years.

Keeping digital backups is recommended to avoid losing data. Scanned receipts, PDF statements, and cloud storage systems provide secure long-term access in case of an HMRC review.

Common Mistakes to Avoid

Many people miss out on legitimate tax relief or face HMRC queries because of poor record keeping. Avoid these common mistakes:

• Estimating mileage instead of keeping actual logs.

• Including personal travel as business mileage.

• Failing to record the purpose of each trip.

• Forgetting to keep receipts for other travel costs.

• Not updating mileage records regularly.

Accurate and consistent documentation is your best defence if HMRC questions your travel expenses.

Claiming Mileage and Travel on Your Tax Return

If you are self-employed, include mileage and travel costs in the business expenses section of your Self Assessment tax return.

If you are employed and your employer does not reimburse you for all your business mileage, you may claim Mileage Allowance Relief. You can do this online using HMRC’s P87 form or through your Self Assessment if you already file one.

For limited company directors, mileage claims should be reimbursed through the company’s payroll or expense system. The company can then claim a tax deduction, and you receive the payment tax-free up to HMRC’s approved rates.

Using Accounting Software for Travel Expenses

Modern accounting software such as Xero, QuickBooks, and FreeAgent can simplify travel expense tracking by:

• Integrating with mileage apps.

• Storing digital copies of receipts.

• Automatically categorising expenses for tax purposes.

• Producing reports for your accountant or HMRC.

Using software not only saves time but also ensures you have a digital audit trail that complies with Making Tax Digital (MTD) regulations.

How an Accountant Can Help

An accountant can make mileage and travel expense management far easier by:

• Reviewing your mileage logs and ensuring compliance with HMRC rules.

• Advising whether mileage rates or actual costs are more tax-efficient.

• Helping you claim allowable expenses correctly on your tax return.

• Setting up systems to track mileage and expenses automatically.

• Representing you if HMRC questions your claims.

Accountants also help businesses establish expense policies for staff, ensuring fair reimbursements and proper documentation.

Summary

Recording mileage and travel expenses accurately is vital for claiming the right amount of tax relief and staying compliant with HMRC. Keep detailed logs of each journey, retain receipts for all travel costs, and store your records securely for at least five years.

Whether you track mileage manually or use digital tools, consistency is key. If you are unsure about what you can claim or how to record it correctly, an accountant can guide you through the process and help you maximise your allowable deductions while keeping your records HMRC-compliant.