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Spondoo Accounting

DOES THE MILEAGE ALLOWANCE OF £0.45 INCLUDE PARKING AND CONGESTION CHARGES?

March 9, 2023

Overview  

According to the Business Income Manual published by HMRC (Her Majesty s Revenue and Customs), the mileage allowance of £0.45 per mile (first 10,000 miles) and £0.25 (after 10,000 miles) are solely intended to cover the cost of fuel and wear and tear on a vehicle.  

Does the allowance include parking and congestion charges? 

The answer is no, this standard mileage allowance does not include parking fees or congestion charges. If an employee incurs these expenses while on business travel, they may be reimbursed separately from the mileage allowance.  

The business income manual clarifies that if an employee is required to pay for parking or congestion charges while on a business trip, these costs can be claimed as separate expenses and reimbursed by the employer. However, the amount claimed must be supported by valid receipts and should not exceed the actual amount paid.  

If an employer does not provide separate reimbursement for parking and congestion charges, then employees can claim these expenses back as a tax deduction.  

Points to Note 

It is important to note that to claim back these expenses, employees must keep accurate records of their mileage, parking fees, and congestion charges, along with any receipts or invoices. The government may require evidence of these expenses to process a tax deduction claim. 

Conclusion 

In summary, the mileage allowance of £0.45 per mile does not include parking fees or congestion charges. However, if the parking or congestion charges are incurred for attending a meeting or training course, or for carrying out business activities, they can be claimed against the mileage allowance. Employers can choose to reimburse employees for these additional expenses separately, and if they do not, employees can claim them back as a tax deduction by keeping accurate records and submitting evidence to the government.  

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Information provided on the site is merely guidance that may change in line with UK law and regulations. Users must not consider this to be financial advice or their sole resource when making any financial decision. Spondoo is a trading name for Accounting SQL Limited, authorised & license accounting firm under the Institute of Financial Accountants.
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