Questions and Answers
What motor expenses can I claim as a director?
I am the director of a limited company and I am buying a car and using it for business - can I claim 45p a mile? Can I also write off the cost of the car and insurance?
Last updated 1 Jul 2026 | First published 7 Oct 2016
By Helen Wood, CA 1 min read
Directors' Series
As of April 2026, the rate was increased to 55p per mile for the first 10,000 business miles per year.
However, the mileage allowance payment of 55p per mile (25p after 10,000 miles) is designed to cover not only fuel costs but also the cost of the car itself and the other running costs such as insurance and repairs. Therefore, there is no need to account for anything else.
If the company is not reimbursing you or is only reimbursing you at the old rate of 45p per mile, you will be able to claim the tax relief on the 10p per mile not paid by the company. When the company starts paying the increased allowance, there are no further tax implications.
If the company pays for your fuel, it should report the fuel as a benefit in kind, although in practice the 55p (or 25p over 10,000 miles) mileage allowance can be deducted from the value of the benefit in kind.
Company cars
To claim all the running expenses of a car in a company, the car needs to be held in the company's name. You would need to carefully consider transferring the car to the company.
Firstly, the mileage allowance payments can often result in a larger deduction for the company, which reduces its profits and therefore its corporation tax bill. But more significantly, private use of a company asset will lead to tax charges on you personally. If the private use is major, the personal tax consequences can outweigh the benefits of owning the car through the company.
How TaxAssist can help
It would be sensible to seek advice from a professional such as your local TaxAssist Accountant before making any decisions, as mistakes in this area can be costly. Contact us on 0800 0523 555 or online here.
Last updated 1 Jul 2026 | First published 7 Oct 2016
This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.
Helen Wood, CA
Helen is a qualified chartered accountant (CA) and joined TaxAssist in 2025 following three years as a freelance content writer for clients in the tax and accounting publishing sector. Prior to this, She spent 17 years at Big Four and Top 10 accountancy firms. Helen writes clear and helpful articles on tax and accounting for businesses and individuals.
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