Mileage Allowance Relief: what if your employer pays less than the HMRC mileage rate?

Mileage Allowance Relief is not an extra mileage payment from HMRC. It is tax relief on the difference between HMRC's approved amount and the qualifying mileage allowance payments you actually received from your employer.

1. When can you claim Mileage Allowance Relief?

HMRC's Mileage Allowance Relief (MAR) applies when an employee uses their own vehicle for qualifying business travel and receives less in mileage allowance payments than the approved amount for that vehicle type. Your own vehicle can include a car you bought or leased with your own money.

If you use a company Tesla, this is not the same calculation. Company-car business travel follows different rules for fuel or electricity reimbursement.

2. The calculation is approved amount minus what your employer paid

The difference is £1,250. That £1,250 is the amount on which Mileage Allowance Relief is calculated. It is not a £1,250 cash refund. The actual tax saving depends on the employee's tax position and applicable income-tax rate.

3. If your employer pays nothing, the records still matter

An employer does not have to pay the HMRC approved mileage rate. If no mileage allowance is paid for otherwise qualifying business travel in your own car, the approved amount can still form the basis of a Mileage Allowance Relief claim. That makes a complete mileage record valuable even when there is no monthly expense reimbursement.

4. Ordinary commuting is not business mileage

The relief only follows mileage that qualifies as business travel. Normal travel between home and a permanent workplace is ordinary commuting and normally private travel. Travel between workplaces, to customers and to a genuine temporary workplace may qualify depending on the facts.

5. What mileage records does HMRC expect?

HMRC tells employees claiming vehicle tax relief to keep records of the dates and mileage of work journeys. When a claim is made, HMRC may require mileage logs showing the reason for each journey and the start and end postcodes. This is exactly where an automatically captured Tesla trip history becomes useful.

6. You cannot add your actual Tesla running costs on top

For an employee using their own vehicle, Mileage Allowance Relief is the statutory relief for the motoring costs covered by the mileage scheme. HMRC does not let you replace it with a separate claim for actual electricity, insurance, servicing, repairs or vehicle finance simply because those costs were higher.

Other travel costs outside the mileage scheme — for example certain parking or overnight expenses — can fall under separate rules.

7. How far back can you claim?

HMRC's employee expense service says eligible employees can claim for the current tax year and the four previous tax years. If you complete a Self Assessment tax return, the mileage relief is claimed through the return instead. Historical claims still need mileage evidence, so reconstructing several years from memory is much harder than keeping the log as you drive.

8. Why DriveQuery fits this problem

DriveQuery can collect the factual journey trail through the Tesla connection and turn it into a reviewable mileage record: capture trip data, recognise familiar routes, suggest Business / Commute / Private, and keep uncertain journeys waiting for confirmation.

Frequently asked questions

Sources: HMRC – vehicles you use for work, HMRC – Mileage Allowance Relief overview, HMRC – no additional own-vehicle motoring relief and HMRC – 2026 mileage-rate increase.