Can You Still Claim Mileage Tax Relief If You Get a Car Allowance?
Many UK workers receive a car allowance as part of their salary, but that doesn’t always cover your full travel costs. In this guide, we’ll explain how car allowances affect your eligibility for mileage tax relief, and how to work out if you’re owed money from HMRC.
What is a car allowance?
A car allowance is a fixed amount your employer gives you (often monthly) instead of providing a company car. It’s designed to cover business travel expenses, insurance, and wear and tear.
Car allowances are taxable income, which means you may still qualify for mileage tax relief.
Can I claim mileage tax relief if I get a car allowance?
Yes, but only if your employer reimburses you less than 45p per mile when you use your personal vehicle for work.
HMRC allows up to 45p per mile for the first 10,000 business miles. If your employer pays you less per mile — regardless of your car allowance, you can claim tax relief on the shortfall.
Example:
You receive a £300 monthly car allowance
Your employer reimburses 20p per mile for travel
HMRC allows 45p per mile
You can claim tax relief on the 25p per mile difference
What journeys count?
You can claim for:
Travel between job sites
Temporary workplace mileage
Client or customer visits
You can’t claim for:
Commuting to your main office
Personal or non-work travel
How much can I get back?
Depending on your mileage and how far back you claim, rebates can range from £300 to over £2,500, even with a car allowance.
How do I make a claim?
TaxBax calculates the shortfall based on your mileage and reimbursement rate. No logbooks or receipts required, just a few details.
Start your claim today
Getting a car allowance doesn’t mean you’re not owed a rebate. Use our calculator to see how much HMRC could owe you.
