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Stuart Powell

2023 Mileage Rates For Car Allowance
What are mileage rates for car allowances?
Mileage rates in car allowances refer to the predetermined rates at which employees are reimbursed for using their personal vehicles for work-related travel. These rates vary based on factors like the type of vehicle and the distance travelled, as determined by the government.
The rates and allowances for mileage and fuel are determined by the government and can vary from year to year. For 2023, the UK government has published the updated rates and allowances for travel, mileage, and fuel. These rates apply to employees who use their personal vehicles for work-related journeys.
Mileage rates for Company Cars after June 2023
Engine Size |
Petrol - rate per mile |
LPG - rate per mile |
1400cc or less | 13 pence | 10 pence |
1401cc to 2000cc | 15 pence | 12 pence |
Over 2000cc | 23 pence |
18 pence |
Engine Size | Diesel - rate per mile |
1600cc or less | 12 pence |
1601cc to 2000cc | 14 pence |
Over 2000cc | 18 pence |
Mileage rates for Private Cars for 2023
From tax year 2011 to 2012 onwards | First 10,000 business miles in the tax year | Each business mile over 10,000 in the tax year |
Cars and vans | 45p | 25p |
Motorcycles | 24p | 24p |
Bicycles | 20p | 20p |
The first thing to note is that there are different rates depending on the type of vehicle you own. If your vehicle runs on petrol or diesel, the rate per mile for the first 10,000 miles is 55 pence. For every mile over 10,000, the rate drops to 25 pence. On the other hand, if you own an electric car, the rate per mile is slightly higher at 55 pence for all miles driven.
It's essential to keep accurate records of your business mileage to claim the allowance correctly. You should document the date, purpose, and distance of each journey you undertake for work. This information will be useful when calculating your mileage allowance. Also, keep in mind that the mileage allowance is intended to cover fuel and general wear and tear on your vehicle, so it's important to ensure your vehicle is properly maintained.
In addition to the mileage rates, there are a few other points to consider. If you give a colleague a lift as part of a work-related journey, you are entitled to claim an additional 5 pence per mile for each passenger. However, this does not apply to social or domestic journeys. Also, if your employer provides you with free fuel for personal use, you will need to deduct a certain amount from your mileage claims. This deduction is known as the Advisory Fuel Rate (AFR).
To ensure a smooth process when claiming your mileage allowance, it's advisable to keep a detailed log of your business mileage, including all necessary information mentioned earlier. This log will serve as evidence to support your claim, should it be required. Make sure to submit your mileage claims promptly and follow your employer's guidelines for reimbursement.
Claiming mileage allowances is generally tax-free as long as you don't exceed the approved rates. However, it's always a good idea to consult a tax advisor or refer to the HM Revenue and Customs (HMRC) guidelines to ensure compliance with any tax regulations that may apply to your specific situation.
Remember, a car allowance can be a significant benefit that saves you money and provides flexibility. By understanding the mileage rates and allowances for 2023, you can make the most of this opportunity. Ensure you keep accurate records, claim for any additional passengers, and deduct the appropriate fuel costs if necessary. Finally, stay updated with any changes in government regulations and seek professional advice when needed.
In conclusion, your new car allowance opens up exciting possibilities for work-related travel. By familiarizing yourself with the mileage rates and allowances for 2023, you can confidently navigate your journeys while maximizing the benefits of this valuable perk. Happy driving, and may your new job be filled with success!
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by George Humphries
Senior Consultant

About the author
George Humphries
George is an experienced recruitment consultant at Aaron Wallis, specialising in recruiting top sales staff for technical and commercial positions. With a background in both FCMG and technical sales, George has first-hand experience in the sales industry, giving him great insight into identifying top performers.
If you're looking to take the next step in your career, George is a valuable source of professional advice, working daily with some of the brightest and biggest businesses throughout the UK.
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