# Mileage policy template for UK SMEs

> A one-page policy aligned with HMRC, UK employment law and GDPR. Ready to adopt.

**Author:** James Mitchell — UK Tax Specialist (HMRC)  
**Published:** 2026-04-03  
**Updated:** 2026-04-28  
**URL:** https://quilometragem.com/blog/mileage-policy-template-for-uk-smes

**TL;DR:** A one-page policy aligned with HMRC, UK employment law and GDPR.

- UK SMEs without a written mileage policy face three risks: HMRC may treat reimbursements as taxable income, employees may dispute calculations and timing, and the company has no defensible audit trail in case of investigation.
- Scope This policy applies to all employees and directors of [Company Ltd] who use a personal vehicle for company business.
- Get sign-off from the directors and (if applicable) the company secretary.
- Many UK SMEs combine a flat car allowance (taxed as salary) with AMAPs on actual business mileage.
- A one-page policy covers HMRC, employment law and GDPR.

## Why a written policy matters

UK SMEs without a written mileage policy face three risks: HMRC may treat reimbursements as taxable income, employees may dispute calculations and timing, and the company has no defensible audit trail in case of investigation.[^hmrc-amap] A one-page policy fixes all three for under an hour of work.

## Template (one page)

**1. Scope**

This policy applies to all employees and directors of [Company Ltd] who use a personal vehicle for company business. It does not cover ordinary commuting (home–permanent workplace) or private use.

**2. Approved rates**

We pay the HMRC AMAP rates: 45p per mile for the first 10,000 business miles in a tax year and 25p per mile thereafter. Motorcycles: 24p. Bicycles: 20p. Passenger payments: 5p per mile per qualifying business passenger.

**3. Eligible journeys**

Included: visits to clients, suppliers, between work locations, to a temporary workplace (under the 24-month rule), and work-related training.

Excluded: home to permanent workplace; private trips; trips where you are reimbursed by a client separately.

**4. Submission and approval**

Mileage claims must be submitted within 30 days of the journey via the company's expense system. Each claim must include: date, origin, destination, business purpose, miles, vehicle. Claims are approved by the line manager and processed in the next monthly payroll cycle.

**5. Records**

The company retains mileage records for 6 years (HMRC requirement: 22 months for Income Tax, but VAT and corporation tax can require longer). Employees may request access to their records under UK GDPR.

**6. VAT and AFRs**

For VAT recovery on the fuel element of AMAPs, employees must retain fuel VAT receipts dated within the relevant quarter and submit them with a cumulative value sufficient to cover the VAT reclaimed.

**7. Excess payments**

If, in exceptional cases, the company pays above the AMAP rate, the excess is taxable and reportable on the P11D, and the employee is responsible for the additional tax via Self-Assessment if requested.

**8. Compliance and disciplinary**

Falsifying mileage claims is treated as gross misconduct under the disciplinary procedure and may result in dismissal and recovery of overpayments.

**9. Review**

This policy is reviewed annually by the Finance team or whenever HMRC updates AMAP or AFR rates.

## How to deploy

1. Get sign-off from the directors and (if applicable) the company secretary.
2. Issue as a circular to all employees with a signed acknowledgement form.
3. Upload to the staff handbook or intranet.
4. Configure your expense tool (Quilometragem, Concur, etc.) with the AMAP rate and the 30-day submission window.
5. Diary an annual review for the first week of April (start of the new tax year).

## A note on hybrid car allowance + AMAP

Many UK SMEs combine a flat car allowance (taxed as salary) with AMAPs on actual business mileage. This is allowed by HMRC: the car allowance is part of pay (subject to Income Tax and NIC), and AMAPs at 45p/25p are tax-free on top. Employees should still be eligible for MAR if the AMAP-equivalent of any flat "mileage allowance" comes in below HMRC's rates.

## Bottom line

A one-page policy covers HMRC, employment law and GDPR. Combine it with a digital expense system and you remove the most common cause of payroll disputes and tax exposure in UK SMEs.

## Sources

- [HMRC — Approved Mileage Allowance Payments (AMAP)](https://www.gov.uk/government/publications/rates-and-allowances-travel-mileage-and-fuel-allowances) — HM Revenue & Customs (2026-04-28)