Name: PR ACCOUNTANTS LTD
Telephone: 03300430792

14. October 2026

Business Mileage and Ordinary Commuting: What Can You Claim?

Article written by PR Accountants LTD in the category General Advice

Introduction

Using a car for work does not automatically make every journey business mileage.

The tax treatment depends on why the journey was made, where it began and ended, whether the workplace was permanent or temporary, how long attendance was expected to continue and whether the individual is an employee, company director or sole trader.

This distinction matters because ordinary commuting is normally private travel.

An employee or director may drive thousands of miles each year, pay for fuel personally and regard the journeys as essential to the job. If the journeys are between home and a permanent workplace, they are generally not qualifying business mileage for tax purposes.

By contrast, a journey from a permanent workplace to a customer, between two workplaces in the same employment or to a genuine temporary workplace may qualify.

The approved mileage rates also changed for 2026/27. For employees and directors using their own cars or vans for qualifying business journeys, the Income Tax rates are now:

55p per mile for the first 10,000 business miles in the tax year
25p per mile for business miles above 10,000

These rates calculate the approved amount. They do not decide whether the journey qualifies.

This guide explains:

What ordinary commuting means
What counts as a permanent workplace
When a workplace may be temporary
How the 24-month and fixed-term appointment rules work
The position for homeworking and owner-directors
How construction and site-based travel should be treated
The difference between personal and company cars
What employers can reimburse tax-free
How Mileage Allowance Relief works
What sole traders can claim
Which records HMRC expects
Common mistakes that can lead to disallowed claims or payroll corrections

Important: This article provides general UK tax information based on the rules and HMRC guidance for 2026/27. Workplace and travel questions are highly fact-specific. Advice should be based on the actual employment duties, contracts, locations, expected duration and travel records.

What is business mileage?

For an employee or company director using their own vehicle, business mileage broadly means travel that qualifies as business travel under the employment-expense rules.

It can include:

Travel in the performance of the employment duties
Travel that is necessary to attend a temporary workplace
Travel between workplaces in the same employment
Travel to a customer or supplier where the duties require attendance
Travel between sites during the working day
Certain journeys from home where the destination is a temporary workplace

It normally excludes:

Ordinary commuting
Private travel
Personal detours
Travel that is substantially for a private purpose
Journeys between separate employments, subject to limited special rules
Home-to-work travel merely labelled as a business expense

The test is not whether the employer benefits from the individual arriving at work. Every employer benefits when an employee attends their workplace. That does not convert ordinary commuting into business travel.

What is ordinary commuting?

Ordinary commuting is broadly travel between:

An employee's home and a permanent workplace
A permanent workplace and any other place the employee visits for non-work reasons

There is normally no tax relief for ordinary commuting.

This remains the case where:

The employee lives a long distance from work
Public transport is unavailable
The employer requires early or late attendance
The employee carries ordinary work equipment
The employee takes calls during the journey
The employee chooses to work from home on other days
The journey is made outside normal working hours
The employee is called in while on standby
The employer pays or reimburses the cost

The absence of tax relief does not stop an employer paying the cost. It means the payment will not normally qualify as tax-free business travel and may need to be treated as taxable earnings or a benefit.

HMRC's ordinary commuting guidance confirms that home-to-permanent-workplace journeys are generally excluded.

What is a permanent workplace?

A permanent workplace is a place the employee regularly attends to perform the duties of their employment and which is not a temporary workplace.

It may be:

The employer's office
A shop
A warehouse
A restaurant
A depot
A construction site
A customer location
A clinic or school
A geographical area, in some cases

The word permanent can be misleading. A workplace does not need to be owned by the employer, named as permanent in the contract or attended forever.

A customer site can become a permanent workplace. A workplace attended under a short contract can also be permanent where it is attended for all or almost all of that employment.

An employee can have more than one permanent workplace at the same time.

For example, a manager who regularly performs substantial duties at two branches may have two permanent workplaces. Home-to-branch travel can be ordinary commuting to either location. However, travel between the branches during the working day may be business travel.

HMRC considers the whole pattern, including:

How often the employee attends
How much working time is spent there
What duties are performed
Whether the employee has a desk, office or support facilities
Whether customers and colleagues expect to contact them there
Whether attendance is for a limited task or temporary purpose

No single factor decides every case.

What is a temporary workplace?

A temporary workplace is broadly a place attended to perform a task of limited duration or for another temporary purpose.

Regular attendance does not automatically make a workplace permanent.

An employee may attend a site every working day for 18 months and still have a temporary workplace if:

The attendance is for a limited task
The expected period does not exceed the relevant limit
The fixed-term appointment rule does not apply
No other rule treats the location as permanent

Travel between home and a genuine temporary workplace can qualify for relief because it is not ordinary commuting.

However, describing a location as temporary in an assignment letter does not settle the tax treatment. The facts and reasonable expectations must support the description.

The 24-month rule

The 24-month rule is one of the most important and most misunderstood travel rules.

A workplace will generally stop being temporary where the employee attends it during a period of continuous work that:

Lasts, or is reasonably expected to last, more than 24 months; and
Involves the employee spending 40% or more of their working time at that workplace

For this purpose, 40% or more of working time is treated as attendance to a significant extent.

The rule concerns the expectation as well as the final duration.

Expected from the beginning to exceed 24 months

If an employee is assigned to a site for 30 months and is expected from the start to spend at least 40% of their working time there, the site is treated as a permanent workplace from the beginning.

There is no first 24 months of tax-free mileage simply because the assignment has not yet reached its second anniversary.

Initially expected to last no more than 24 months

If an assignment is initially expected to last 18 months, the workplace may be temporary, assuming the other conditions are satisfied.

If the assignment is later extended and the employee then expects to attend for more than 24 months in total, the workplace normally becomes permanent from the date that expectation changes.

Relief is not necessarily withdrawn retrospectively for the earlier period when the reasonable expectation was genuinely no more than 24 months.

Attendance below 40%

Attendance below 40% does not automatically guarantee temporary-workplace treatment. The wider permanent-workplace and temporary-purpose tests still apply.

The 40% threshold is relevant to the period-of-continuous-work rule. It is not a general rule saying that every location attended for 39% of working time is temporary.

HMRC explains the test in its guidance on the 24-month temporary workplace rule.

Worked example: an 18-month customer assignment

A financial controller normally works at the employer's Birmingham office.

They are assigned to a customer's Coventry premises four days a week for 18 months to implement a new reporting system. The task and expected end date are documented.

The Coventry site can be a temporary workplace because:

The assignment has a defined temporary purpose
It is expected to last no more than 24 months
The employee remains employed in an ongoing role beyond the assignment

Qualifying travel to the Coventry site may be business travel.

The conclusion could change if the assignment is extended or the employee's wider role changes.

Worked example: an assignment extended beyond 24 months

Assume the same assignment is expected to last 18 months when it begins.

At month 15, the project is formally extended so the total expected attendance becomes 30 months.

The site will generally cease to be temporary from month 15, when the reasonable expectation changes. Home-to-site travel after that point becomes ordinary commuting.

The employer should not continue reimbursing the mileage tax-free until month 24 merely because the employee has not yet been there for two years.

This is why project extensions should be communicated to payroll and finance as soon as they are agreed.

The fixed-term appointment rule

The 24-month rule is not the only test.

A workplace can be permanent even where attendance is expected to last less than 24 months if the employee attends it for all or almost all of the period for which they are likely to hold that employment.

This is commonly called the fixed-term appointment rule.

For example, an individual is employed on a 12-month contract specifically to work at one location for the entire contract.

The location is likely to be a permanent workplace for that employment. The individual cannot necessarily claim home-to-site mileage simply because the contract lasts less than 24 months.

HMRC states that it would not normally challenge relief under this particular rule where the expected attendance is less than 80% of the likely duration of the employment. That is not a universal 80% safe harbour for all travel questions. The other workplace tests still apply.

The official fixed-term appointment guidance should be considered for project workers, agency workers and employees recruited for one assignment.

Can an employee have two permanent workplaces?

Yes.

An employee may regularly perform substantial duties at more than one workplace.

For example, a regional manager attends:

Branch A every Monday and Tuesday
Branch B every Wednesday and Thursday
Customer locations on Fridays

Both branches may be permanent workplaces. Travel from home to either branch may be ordinary commuting.

Travel directly between Branch A and Branch B in the performance of the same employment can qualify as business travel.

The position differs where the journey is between two separate and unrelated employments. A journey from the permanent workplace of Job 1 to the permanent workplace of Job 2 is generally not treated as business travel merely because the jobs are consecutive.

There are limited rules for directors and employees of associated companies travelling between company workplaces for their duties. Those cases should be reviewed separately.

Travel between workplaces

Where an employee is required to travel between two places of work in the same employment to perform their duties, the journey will normally be business travel.

Examples include:

Office to customer premises
Branch to branch
Warehouse to site
School to training venue
Customer A to Customer B
Employer's premises to a temporary project location

The fact that both locations are permanent workplaces does not prevent the journey between them from qualifying.

The home-to-first-workplace and last-workplace-to-home legs must be assessed separately.

For example, a care worker employed by an agency visits three customers in one day.

Travel between Customer 1, Customer 2 and Customer 3 may qualify. Home to Customer 1 and Customer 3 to home may still be ordinary commuting if the workplaces are permanent under the relevant engagement rules.

Passing the office on the way to a customer

The treatment depends on what happens at the office.

If an employee travels from home, stops at their permanent workplace and performs substantive duties, there are normally two journeys:

Home to permanent workplace, which is ordinary commuting
Permanent workplace to customer or temporary workplace, which may be business travel

If the employee merely passes the office or makes an incidental stop during an otherwise qualifying business journey, the result may differ.

The employer should not automatically claim the entire home-to-customer distance or automatically exclude it. The duties performed, reason for the stop and actual route matter.

Arranging a business stop does not convert a commute

An ordinary commute cannot be converted into business mileage by adding an incidental task.

Examples that may be insufficient include:

Making a telephone call on the way
Collecting ordinary post near the office
Stopping briefly to buy stationery
Scheduling a convenient meeting on the normal route solely to support a mileage claim
Carrying routine files or a laptop

The attendance at the destination must be necessary for performing the employment duties, not merely arranged for the employee's convenience.

HMRC has safeguards for journeys that are substantially the same as the ordinary commute or are arranged to obtain tax relief.

A temporary workplace very close to the permanent workplace

Travel to a temporary workplace can still be treated as ordinary commuting where the journey is substantially the same as the normal commute.

Suppose an employee normally drives 12 miles from home to an office. For two weeks, they are asked to work at a building next door with the same route and almost identical journey.

The destination may technically be a temporary workplace, but the journey may be treated as ordinary commuting because it is substantially the same as the usual commute.

Moving a meeting a short distance from the permanent workplace does not necessarily create a qualifying mileage claim.

Homeworking does not automatically make home a workplace for travel

Many employees now work from home for part of the week.

That does not automatically make travel from home to the employer's office business travel.

If an employee has office space available and chooses to work from home for convenience, journeys to the office are normally ordinary commuting.

The position is stronger only where working from home is an objective requirement of the employment duties rather than a personal choice or flexible arrangement.

Even where the home is accepted as a workplace, travel to another permanent workplace is not automatically deductible. The journey must satisfy the specific travel-in-the-performance-of-duties rules.

The facts may include:

Whether the job requires substantive duties to be performed at home
Whether appropriate employer premises are available
Whether the employee must travel while performing the duties
Whether the journey is between two workplaces or simply to begin work at the office
What the employment contract says
What happens in practice

An employment contract stating that the employee is home-based can be relevant, but wording alone does not override the facts.

Owner-directors working from home

Owner-directors should be particularly careful.

Registering a home as the company's registered office or doing bookkeeping at the kitchen table does not automatically make every journey from home business travel.

If the director regularly travels from home to the company's office, shop, clinic, restaurant or other permanent base, those journeys are likely to be ordinary commuting.

Travel from home directly to a customer or genuine temporary workplace may qualify where the journey is necessary for the duties. However, it should not be assumed that every customer visit is temporary or every journey from a home office is allowable.

The company should document:

The director's employment duties
Normal working locations
Whether homeworking is required or chosen
The purpose of each journey
The expected duration of attendance at customer sites
Any permanent business premises

Company control does not allow the director to redefine private travel for tax purposes.

Construction sites and site-based employees

Construction creates frequent mileage errors because workplaces change and workers may be described as mobile.

A construction site may be a temporary workplace where an employee is sent there for a limited project within an ongoing employment.

However, home-to-site travel may not qualify where:

The site is expected from the outset to be attended for more than 24 months for at least 40% of working time
The employee is recruited for a fixed-term role at that one site
The site is attended for all or almost all of the employment
The journey is substantially the same as the employee's normal commute
The worker is engaged through an intermediary and special restrictions apply
The individual is actually self-employed and the trade has a fixed base elsewhere

CIS registration does not determine whether travel is allowable.

The Construction Industry Scheme deals with payments to contractors and subcontractors. It does not make every worker self-employed and does not automatically make every site temporary.

Employment status and travel treatment must be considered separately.

Depots, yards and task-allocation points

A depot, yard or similar location can be a permanent workplace where an employee regularly attends because:

It is the base from which they work; or
It is where they are routinely allocated tasks

For example, a delivery driver who reports to the same depot each morning to receive the vehicle, route and work instructions may have a permanent workplace at the depot.

Home-to-depot travel can therefore be ordinary commuting, even though the driver spends most of the working day travelling.

Attendance at a location for an incidental reason does not always make it a permanent base. The regularity and main purpose of attendance must be considered.

Travelling appointments and itinerant employees

Some employments involve travelling in the performance of the duties rather than travelling to a workplace before duties begin.

Examples may include certain travelling sales representatives, service engineers and mobile workers whose duties require continuous travel between customers.

The treatment is fact-specific.

Relevant questions include:

Is there a permanent depot or office?
Where are tasks allocated?
Where do the substantive duties begin?
Does the employee work within one defined area?
Are customer sites temporary?
Is home genuinely a workplace?
Is the first journey to a workplace or part of performing the duties?

The label mobile worker does not decide the issue.

Emergency call-outs and standby travel

Being called to a permanent workplace outside normal hours does not normally turn the journey into business travel.

For example, an employee on standby is called from home to their usual restaurant, office or factory. Home-to-permanent-workplace travel remains ordinary commuting in the usual case.

There are narrow exceptions where duties begin at home and the emergency travel itself is performed in the course of those duties. Those conditions are strict and should not be applied to routine overtime or ordinary call-outs without review.

Private detours during business journeys

A private detour does not necessarily disqualify the entire business journey, but the private element must be excluded.

Suppose an employee drives from the office to a customer and makes a significant detour to collect a personal purchase.

The mileage attributable to the business route may qualify. The additional private detour does not.

If the business purpose is merely incidental to a substantially private journey, the entire journey may be private.

Records should show the reasonable business distance rather than the total odometer movement where a material private detour occurred.

The approved mileage rates for 2026/27

Where an employee or director uses their own vehicle for qualifying business travel, the approved Income Tax rates are:

Cars and vans

55p per business mile for the first 10,000 miles
25p per business mile after 10,000 miles

Motorcycles

24p per business mile

Bicycles

20p per business mile

Passengers

An employer may pay an additional 5p per passenger per business mile where the employee carries a fellow employee in a car or van and the passenger is also making a business journey.

The passenger rate applies only where the employer actually makes the specific passenger payment. There is no Mileage Allowance Relief where the employer pays less than 5p or pays nothing for the passenger.

HMRC publishes the current figures in its mileage allowance rates.

The first 10,000 miles are combined

The 10,000-mile threshold is not reset each time the employee changes car.

Business mileage for vehicles of the same type is aggregated across the tax year.

For example, a director uses one personal car for 7,000 qualifying miles and replaces it with another personal car used for 5,000 qualifying miles in the same tax year.

The calculation is:

First 10,000 total car miles at 55p
Remaining 2,000 car miles at 25p

The director cannot claim 55p on the first 10,000 miles for each car.

Where mileage payments arise from associated employments, special aggregation rules can apply.

Worked example: 12,000 business miles

An employee uses their own car for 12,000 qualifying business miles during 2026/27.

The approved amount is:

10,000 miles x 55p = £5,500

2,000 miles x 25p = £500

Total approved amount = £6,000

If the employer pays £6,000, the payment can normally be tax-free, subject to the business-travel and record-keeping conditions.

The £6,000 is intended to cover the overall vehicle cost. It is not merely a fuel allowance.

What costs does the mileage rate cover?

The approved mileage rate is intended to cover vehicle ownership and running costs, including:

Fuel or charging
Insurance
Servicing
Repairs
Tyres
Vehicle Excise Duty
MOT
Depreciation
Finance costs

An employee using the statutory mileage method cannot normally claim additional tax relief because their actual car costs were higher.

Separate qualifying business-travel costs can still be considered, such as:

Parking at a temporary workplace or business destination
Tolls
Congestion charges
Ferries

Private parking, fines and penalties do not become allowable because they were incurred during working hours.

Personal car versus company car mileage

The 55p and 25p approved mileage rates apply where the employee or director uses their own vehicle.

They do not apply in the same way to a company-owned or company-leased car.

Where an employee pays for fuel or electricity for business travel in a company car, the employer may reimburse the business amount using HMRC's advisory fuel rates or another supportable actual-cost method.

Advisory fuel rates are updated periodically and depend on fuel type, engine size and, for electric cars, charging location under the current guidance.

The company should use the rate applying when the journey or reimbursement is calculated and retain mileage evidence.

Paying 55p per mile for a company car can create taxable reimbursement because the employer already bears the vehicle ownership cost.

HMRC's current advisory fuel rate guidance applies specifically to company cars.

What if the employer pays less than the approved amount?

An employer does not have to pay 55p or 25p.

It may pay a lower contractual or expenses-policy rate.

If the employee receives less than the approved amount for qualifying business mileage, the employee may claim Mileage Allowance Relief on the shortfall.

The relief reduces taxable income. HMRC does not normally pay the entire shortfall.

Worked example: employer pays 30p per mile

An employee drives 8,000 qualifying business miles in their own car.

The approved amount is:

8,000 x 55p = £4,400

The employer pays:

8,000 x 30p = £2,400

The Mileage Allowance Relief shortfall is:

£4,400 less £2,400 = £2,000

The illustrative Income Tax reduction is:

£400 for a 20% taxpayer
£800 for a 40% taxpayer
£900 for a 45% taxpayer

The employee does not receive £2,000 from HMRC. They receive tax relief at their applicable rate, subject to their overall tax position.

There is no equivalent Mileage Allowance Relief for National Insurance.

What if the employer pays more than the approved amount?

Where total mileage payments exceed the approved amount, the excess is taxable.

The employer must deal with the excess through the appropriate PAYE or benefits-reporting process.

For 2026/27, the Income Tax and National Insurance mileage thresholds for cars can diverge after 10,000 miles:

The Income Tax approved rate is 25p for miles above 10,000
The National Insurance qualifying rate is 55p for every business mile

This means a payment above 25p after 10,000 miles may create an Income Tax charge even where it remains within the National Insurance qualifying amount.

Employers should not assume the same excess applies for PAYE and National Insurance. Payroll should use the current 2026/27 rules and cumulative mileage records.

What if the employer pays nothing?

The employee may still claim Mileage Allowance Relief for qualifying business mileage in their own vehicle.

The claim may be made through HMRC's job-expenses service, form P87 where appropriate or the Self Assessment tax return where the individual files one.

The individual should retain the mileage log and employment details supporting the claim.

HMRC's vehicle expense relief guidance explains the available routes.

How directors claim mileage from their own companies

A company director is an employee for these mileage rules.

The director should submit an expense claim to the company showing the qualifying journeys and calculation.

The company should:

Review whether each journey qualifies
Check the cumulative annual mileage
Apply the correct rate
Approve and retain the claim
Pay the director or credit a properly maintained director's loan account
Record the expense accurately in the accounts
Keep evidence for PAYE, Corporation Tax and VAT purposes

A mileage journal posted at the year-end without journey records is weak evidence.

The director should not estimate a round monthly mileage amount or use fuel-card statements as a substitute for a mileage log.

Can mileage be credited to a director's loan account?

Yes, a valid business mileage reimbursement can be credited to the director's loan account instead of being paid immediately.

The underlying claim must still be genuine, calculated correctly and supported by records.

The entry should not be used to manufacture a credit balance or clear personal drawings without evidence.

The company should retain:

The mileage claim
Approval
The accounting entry
Any payment evidence
The running director's loan account

VAT on mileage payments

A VAT-registered employer may be able to reclaim VAT on the fuel element of qualifying mileage reimbursed for an employee's own car.

It cannot reclaim VAT on the full 55p or 25p mileage amount.

The business normally needs:

A valid VAT fuel receipt
A qualifying business journey
A mileage record
A reasonable fuel-only element
The correct VAT fraction
Any necessary partial-exemption restriction

HMRC advisory fuel rates or another recognised method may be used to establish the fuel element in appropriate cases.

If the director drives an electric personal car, VAT and charging evidence require separate consideration because there may not be a conventional fuel receipt.

VAT recovery should not be assumed merely because the mileage reimbursement is allowable for Corporation Tax.

Mileage records HMRC expects

A reliable mileage log should include:

Date of each journey
Start location or postcode
Destination or postcode
Business purpose
Customer, site or event attended
Number of qualifying miles
Vehicle used
Amount claimed
Passenger name where a passenger payment is claimed
Any private detour excluded
Cumulative mileage for the tax year

Useful supporting evidence can include:

Calendar appointments
Job sheets
Customer records
Site-assignment letters
Parking and toll receipts
Project contracts
Route records
Odometer readings

Records should be created close to the time of travel. Reconstructing a full year from bank statements and memory can lead to duplicated, omitted or private journeys being included.

HMRC can compare claims with working patterns, customer locations, payroll records and diary evidence.

Is a fuel receipt enough?

No.

A fuel receipt shows that fuel was purchased. It does not show:

Who used it
Which vehicle was used
Where the vehicle travelled
Why the journey was made
Whether the journey was business or private
The number of qualifying miles
Whether the mileage threshold had been exceeded

Fuel receipts may support VAT recovery, but they do not replace a mileage log.

Can map software calculate the mileage?

Map software can support the distance, but it does not prove the business purpose.

The business should use a consistent and reasonable route. It should not automatically choose the longest route or claim unnecessary detours.

Where road closures, site access or another business reason required a longer route, the record should explain it.

The actual qualifying business distance should be claimed.

Self-employed mileage rules

Sole traders and qualifying partnerships are not employees of their own businesses.

They may calculate vehicle expenses using either:

Simplified mileage expenses; or
Actual business costs, including capital allowances where applicable

Under the simplified mileage method for 2026/27, cars and goods vehicles use:

55p for the first 10,000 business miles
25p for business miles above 10,000

The mileage amount covers buying, running and maintaining the vehicle.

A sole trader cannot use simplified mileage for a vehicle if they have already claimed capital allowances or treated its cost as a business expense.

Once the simplified rate is used for a particular vehicle, it must continue while that vehicle is used in the business.

Parking and other separate qualifying travel costs may still be claimable in addition to simplified mileage.

HMRC's simplified vehicle expense guidance explains the conditions.

Ordinary commuting for sole traders

The employee temporary-workplace rules do not simply transfer to sole traders.

For the self-employed, the main question is whether the travel cost is incurred wholly and exclusively for the trade.

Travel between home and a fixed business base is generally private commuting, even where the trader:

Keeps records at home
Stores some tools at home
Makes business calls before leaving
Chooses to live far from the business premises

The result can differ for an itinerant trader whose genuine base of operations is at home and who travels to numerous temporary job locations.

HMRC gives a jobbing builder as an example of an itinerant trader where home-to-site travel may be allowable. That does not mean every builder can claim every home-to-site journey.

The facts should establish:

Where the trade is based
Whether there is another fixed workplace
Whether sites are genuinely temporary
Whether the trader operates within a habitual area
The frequency and duration of each site
Whether travel has a private purpose

HMRC's self-employed home-to-work travel guidance should be considered rather than applying the employee 24-month rule automatically.

Worked example: self-employed electrician with changing sites

A self-employed electrician runs the trade from home, holds business records there, schedules work there and travels to numerous unrelated customer sites.

Each site is attended briefly to complete a specific job. There is no separate workshop, depot or long-term site.

The business travel from the home base to the customer sites may be allowable as part of an itinerant trade, subject to the full facts and records.

The conclusion could change if the electrician begins attending one development every day for an extended period and that site becomes the effective business base.

Worked example: self-employed shop owner

A sole trader completes bookkeeping at home but operates a retail shop six miles away.

The daily journey from home to the shop is generally private home-to-work travel.

The fact that some administration is performed at home does not make the daily commute allowable.

Travel from the shop to a wholesaler, bank or temporary trade event may be a business journey.

What about landlords?

An individual landlord may be able to claim qualifying travel incurred wholly and exclusively for the property business, including mileage to inspect properties, meet contractors or carry out management duties.

Private-purpose travel and ordinary personal journeys must be excluded.

The mileage method can be available for qualifying property-business travel under current rules, but restrictions can apply depending on how vehicle costs have previously been claimed.

For example, a journey to inspect a rental property may qualify, while a trip that is mainly to visit friends nearby with an incidental property stop may be substantially private.

Landlords should maintain the same journey-level records as other businesses.

Employees working through agencies or intermediaries

Agency and intermediary arrangements require particular care.

Where each engagement is treated as a separate employment and the worker attends one location for all or almost all of that engagement, the location may be a permanent workplace for that employment.

Special restrictions can also apply where a worker provides services through an employment intermediary and is subject to supervision, direction or control.

The fact that assignments change does not automatically make every workplace temporary.

Personal service companies, umbrella arrangements and agency contracts should be reviewed using the specific legislation rather than a generic two-year rule.

Common business mileage mistakes

Claiming the normal commute

Home-to-permanent-workplace travel is generally private, even when the employee must drive.

Treating every customer location as temporary

A customer site can become a permanent workplace based on the regularity, duration and purpose of attendance.

Assuming the first 24 months always qualify

If attendance is expected from the beginning to exceed 24 months, the workplace may be permanent from day one.

Ignoring an assignment extension

The tax treatment can change when the reasonable expectation changes, not only when month 24 is reached.

Ignoring the fixed-term appointment rule

A 12-month workplace can be permanent where it is attended for all or almost all of a 12-month employment.

Treating a homeworking choice as a business requirement

Hybrid working does not automatically make home-to-office travel allowable.

Claiming 55p for a company car

The approved mileage rates are for an employee's own vehicle. Company-car fuel reimbursement follows different rules.

Resetting the 10,000-mile threshold after changing cars

Business miles for cars of the same type are aggregated during the tax year.

Claiming actual car costs as well as mileage

The statutory mileage rate already represents the ownership and running costs for employees. Sole traders using simplified mileage cannot also claim capital allowances and running costs for the same vehicle.

Using fuel receipts instead of a mileage log

Fuel purchases do not prove that the journeys qualify.

Reimbursing more than the approved amount without payroll treatment

The excess can be taxable. In 2026/27, PAYE and National Insurance mileage limits can differ after 10,000 miles.

Claiming private detours

Only the business part of a mixed journey may qualify.

Assuming CIS status makes site travel allowable

CIS, employment status and travel deductibility are separate questions.

A monthly mileage-control process

Businesses should review mileage claims monthly rather than waiting until the year-end.

The review should confirm:

The individual used their own vehicle where the approved mileage rates were applied.
Each journey had a clear business purpose.
Ordinary commuting was excluded.
Temporary-workplace claims remain temporary based on current expectations.
Assignment extensions were considered.
Cumulative mileage was updated.
The correct 55p or 25p rate was used.
Passenger claims identified the qualifying passenger.
Private detours were removed.
The claim was approved before payment.
VAT recovery was supported separately.
Payroll reviewed any excess payments.

The person approving the claim should understand the employee's working pattern. A technically correct mileage calculation does not fix an ineligible journey.

Questions to ask before approving a journey

For each recurring route, ask:

What is the employment or trade?
Where is the permanent workplace?
Is there more than one permanent workplace?
Why was the destination attended?
Was the attendance required by the duties?
Was it for a limited task or temporary purpose?
How long was attendance expected to continue?
Is 40% or more of working time spent there?
Does the 24-month rule apply?
Does the fixed-term appointment rule apply?
Is the journey substantially the same as the normal commute?
Did the employee perform substantive duties at the permanent workplace on the way?
Was there a private purpose or detour?
Who owns the vehicle?
How much has already been paid for mileage in the tax year?

The answers should be documented where the amount is material or the pattern is unusual.

Frequently asked questions

Can I claim mileage from home to my normal office?

Normally no. Travel between home and a permanent workplace is ordinary commuting.

Can I claim if I work from home three days a week?

Not automatically. If office attendance remains part of the role and homeworking is a choice or flexible arrangement, home-to-office travel is generally ordinary commuting.

Can I claim travel from home directly to a client?

Potentially, where the client location is a temporary workplace and attendance is necessary for the duties. The journey can still be excluded if it is substantially the same as the normal commute or arranged for personal convenience.

Can I claim from the office to a client?

Usually, if the journey is required to perform the duties. Travel between workplaces in the same employment is generally business travel.

Can I claim from one client to another?

Often yes, where both visits are required in the same employment and the journey is between workplaces. The journey from home to the first client and from the last client home must be assessed separately.

Does a temporary workplace become permanent exactly after 24 months?

Not necessarily. If attendance is expected from the outset to exceed 24 months for 40% or more of working time, it may be permanent from the beginning. If the expectation changes later, treatment changes from that point.

Can a six-month workplace be permanent?

Yes. It may be permanent under the fixed-term appointment rule where it is attended for all or almost all of a six-month employment.

Can I have two permanent workplaces?

Yes. Regular and substantial duties at two locations can make both permanent. Travel between them in the same employment can still qualify.

Can a director claim mileage from home?

Only for qualifying business travel. Being a director, working from home or using home as the registered office does not make ordinary commuting allowable.

Is the 55p rate just for petrol and diesel cars?

No. The approved car rate applies to qualifying business mileage in an employee's own car, including electric and hybrid cars.

Can I claim more because my car is expensive to run?

An employee cannot claim additional Mileage Allowance Relief above the statutory amount because actual costs are higher. An employer may choose to pay more, but the excess can be taxable.

Can I claim mileage if the company does not reimburse me?

Yes, you may claim Mileage Allowance Relief for qualifying business mileage in your own vehicle. The relief is a tax deduction, not reimbursement of the full approved amount.

Can the company pay less than 55p?

Yes. The company can choose its reimbursement rate. The employee may claim tax relief on the qualifying shortfall.

Can the company pay a flat monthly car allowance and mileage?

It can, but a round-sum car allowance is normally taxable pay. Qualifying mileage payments are considered separately. The scheme should avoid double counting and apply the correct payroll treatment.

Can parking be claimed as well as mileage?

Qualifying business parking may be claimed separately. Parking at a permanent workplace connected with ordinary commuting may not qualify for tax-free reimbursement under the business-travel rules.

Are speeding fines allowable?

No. Fines and penalties are not made allowable by the fact that the driver was travelling for work.

Does carrying tools make my commute business mileage?

Usually not. Carrying ordinary tools or equipment does not by itself turn home-to-permanent-workplace travel into a business journey. Exceptional facts may require separate review.

Does an emergency call-out qualify?

Not automatically. Travel from home to a permanent workplace generally remains ordinary commuting even when the employee is called in unexpectedly. Narrow exceptions can apply where duties begin at home and strict conditions are met.

How long should mileage records be kept?

Employers and businesses should retain mileage and expense records for the applicable tax, PAYE and accounting record-retention periods. The precise period depends on the taxpayer and record type. A limited company will commonly retain accounting and Corporation Tax records for at least six years, subject to longer periods in some circumstances.

The key message

Business mileage is determined by the journey, not by the rate claimed.

The correct process is:

Decide whether the journey qualifies as business travel.
Exclude ordinary commuting and private travel.
Establish whether each workplace is permanent or temporary.
Consider the 24-month, fixed-term appointment, depot and area rules.
Confirm who owns the vehicle.
Apply the correct mileage or fuel rate.
Keep a detailed, contemporaneous record.
Apply PAYE, National Insurance and VAT treatment correctly.

The 55p rate for 2026/27 is valuable, but it does not widen the definition of business travel.

A large claim based on the wrong journeys remains wrong even if the arithmetic is accurate.

How PR Accountants Ltd can help

PR Accountants Ltd can help businesses, company directors, sole traders, landlords and contractors apply the mileage and travel rules correctly.

Our support can include:

Reviewing permanent and temporary workplace arrangements
Applying the 24-month and fixed-term appointment rules
Reviewing director mileage claims
Creating mileage and expenses policies
Checking payroll treatment of mileage payments
Calculating Mileage Allowance Relief
Correcting excess or underpaid mileage treatment
Advising on personal and company cars
Reviewing self-employed simplified mileage
Assessing construction and site-based travel
Reviewing VAT recovery on mileage payments
Improving bookkeeping and expense records
Supporting HMRC enquiry responses

The most effective time to review a workplace is when an assignment begins or changes, not after two years of mileage has already been claimed.

PR Accountants Ltd
Email: info@praccounting.co.uk
Telephone: 0330 043 0792
Mobile and WhatsApp: 07946 617369
Website: www.praccounting.co.uk

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Official guidance

This article is based on UK rules and published HMRC guidance available for the 2026/27 tax year at the date of publication. Tax treatment depends on the employment, trade, workplace pattern, assignment expectations, vehicle ownership and evidence. Obtain personalised advice before relying on a claim.