Can I claim mileage allowance?

One of the most common questions we get asked at Medics’ Money is whether, and how, doctors can claim tax relief for using their own cars. In the blog below, Dr Ed Cantelo, Chartered Accountant and Tax Advisor, GP trainee and Medics’ Money founder, gives some information on the rules surrounding this important issue. The rules around mileage are very complex, especially if self employed or locuming and we would always recommend seeking advice from a specialist medical accountant, such as those featured on Medics’ Money. Some information for locum GPs can be found here

All UK taxpayers are entitled to tax relief for any travel cost that they must incur in order to do their jobs. If you are not reimbursed by your trust for these expenses, you may be able to claim a deduction from your taxable income.

Before we go further, it is important to note that HMRC will not generally allow you to claim tax relief for expenses incurred travelling between your home and permanent place of work, that is of ordinary commuting. If your trust does pay you for the cost of ordinary commuting HMRC treat this as additional salary and your trust should deduct tax and National Insurance Contributions (NIC) from the amount paid to you.

You may be able to claim tax relief on other journeys that are mandatory for work however, such as home visits or journeys to other hospitals for mandatory teaching.

What doctors tax relief is available on mileage?

If as a doctor you use your own car for allowable business travel there is a system of tax-free approved mileage allowances available. HMRC set out the maximum amount of tax free allowance per mile travel under what is known as the “approved mileage allowance payment” scheme.

If you are reimbursed by your trust up to these approved amounts, these payments will be free from tax and NIC. If you are reimbursed by less than these amounts you can claim tax relief on the balance. Note that it works the other way too – if you are reimbursed by more than that allowed under the approved mileage allowance payment you will have to pay income tax and NIC on the difference.

At the time of writing(June 2019), the approved mileage allowance payment (AMAP) rates are:

  First 10,000 business miles in the year Each business mile over 10,000 miles in the tax year
Cars and vans 45p 25p
Motorbikes 24p 24p
Bicycles 20p 20p


Example:

If you are a GP trainee and drive your car to home visits travelling 100 business miles, and you are not reimbursed anything at all, you can claim tax relief on 45p x 100 i.e. £45. If you pay tax at 40% you will get £18 off your tax bill.

If in the example above your employer pays you 20p per mile you can claim your claim will be reduced to (45p x 100) – (20p x 100) = £45 – £20 = £25 of tax relief i.e. £10 of tax relief. The amount you receive from your employer (that is the 20p x 100) will not be taxable. 

If in the example above your employer pays you 50p a mile you will actually owe tax as this exceeds the 45p maximum approved payment. In this example you will owe: (50p x 100) – (45p x 100) = £50 – £45 = £5 which as a 40% taxpayer would result in a tax bill of £2.

If you were to drive, say, the unlikely distance of 15,000 miles in a given year as part of your job as a doctor (remember you cannot include your ordinary commute), and without any reimbursement you could claim: 45p x 10,000 plus 25p x 5000 = £5,750. The tax relief at 40% on this would be £2,300.

What records should I keep to claims doctors tax relief ?

We would recommend that you keep a log of any business travel to include how many miles you travelled, when and your destination.

How do I make a doctors tax relief claim?

If you wish to make a claim for tax relief (or if you believe you owe tax and want to pay it) you can do so via your Personal Tax Account.

If you do not already have a Personal Tax Account, it’s easy to set one up – go here for our easy to use free guide to how to do so.

Once you have set up your Personal Tax Account, the next step is to use it to make your claim. Again, we have a simple to use free guide which you can download here to start making your claim for this and all your other professional expenses.