I was very surprised by a tweet this week informing me that people were paying upwards of £50 to have someone complete a claim for a tax refund for them if their employer was paying them less than 40p for each business mile that they travelled.

Making a claim is really easy and something you can do yourself.

All you need is a form P87 from HMRC – stay with me!

It’s just their fancy name for a four page form – most of which you will not need to complete.

Here’s an easy to understand guide to how to claim it…

Download and print the form from here:


Page One

Now this is easy stuff!

You name, address, employers name & address – I won’t teach you to suck eggs on that one. I think you can manage.

Two boxed to be aware of though -at the top right hand corner.

You need to enter you national insurance number and employer PAYER reference number.

You can find these on your pay slip or your P60 (you get this each year about May time) or ask you payroll / HR department.

One final thing – you claim the tax back for each tax year.

A tax year runs from 6th April to 5 April each year – use 1st April to 31 March to make it simple.

So you need to organise your expenses claims into tax years.

If you are claiming the rebate for 1st April 2009 to 31 March 2010 then enter the tax year 2010 in the very top right hand box – Year to 5 April 2010 in this example.

If you are claiming the rebate for 1st April 2010 to 31 March 2011 then enter the tax year 2011 in the very top right hand box – Year to 5 April 2011 in this example.

You get the idea!

Page Two

OK just a couple of easy calculations to do on this page and then you are nearly done.

About have way down the page you have the box – Total Business Mileage.

Working on your expenses in a tax year from 1st April to 31st March – enter the total business miles that you have travelled.

If less than 10,000 miles – just complete box one by multiplying the miles by 40p.

If over 10,000 you need to put 10,000 multiplied by 40p into box one

and then

the total miles less 10,000 multiplied by 25p in box 2.

Now that is the hardest bit done!

Add box 1 to box 2 and enter the total into box 3 and box 6.

(Assuming that you are not claiming for a motor cycle or a cycle)

Enter the amount that you were repaid in mileage from your employer into box 7.

Obviously this should be less than the total in box 6 otherwise there is no refund due.

Box 8 is simply box 6 minus box 7.

This is the amount t that you will get tax relief on BUT not the amount of the cheque that you will receive!

The refund will be the box 8 amount multiplied by the highest rate of tax that you pay – likely to be either 20% or 40% (and could be 50% if you earn over £150,000!).

So to get the total amount of the refund that you will receive you multiple box 8 by 20% or 40% – depending on your highest tax rate.

Page Three

If you are only claiming mileage you can ignore this entire page – move onto page four.

Page Four

A simple page to complete.

Enter the total from the final Box labelled 8 on Page two into the box marked 8, in section 6.

The same total goes into Box 14 on that page.

Then all you need to do it sign and date it.


Finally – send it off to HMRC.

To find the address that you need to send the form to you need the employer reference number you entered on the first page.

Use that to find the correct address on this page …


Enter it in the field under the heading:

Tax Office locator

Give it a few weeks and the refund should arrive. If it doesn’t give them a call to chase it.

Hope this helps!


About the author


Original blog and title posted by Elaine Clark of CheapAccounting.co.uk on the date at the top of the blog. All blogs are date and time stamped at the point of creation and publication.

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2 Responses to “How to claim a tax refund – if you receive mileage at less than 40p / mile”

  1. Dear Sirs,
    I am hoping you can help. I started working for a care
    company in
    September 2009, I use my car and pay for my petrol. The
    company do not
    help towards petrol or anything so in April 2010 I
    completed a self
    assessment. I had done 11500 miles so did the calculation
    10000 x 40p and
    1500 at 25p and subsequently received a payment of £800.00
    and my tax code
    was changed to 1085L. This year I am doing the same I
    have done slightly
    more miles than the previous year BUT when I came to
    complete the self
    assessment it states I am only owed £43.20! Can this be
    right? I realise
    that my tax code for the previous year was 1085L but this
    figure is based
    on the mileage I did in 2009/2010.
    My tax code for 2009/2010 was calculated based on the
    figure I gave of
    £4380.00 which was based on 11,500 miles, I received 20%
    of this back and
    the balance was added to my personal tax code of 647L.
    (6475 plus 4380 =
    I thought you could claim the mileage back every year and
    get a lump sum
    back and have the balance added to your tax code, is this
    not right?
    Please advise…
    Many thanks and regards,
    Amanda Daniels.

  2. Amanda – if you are unsure about your self assessment I would suggest getting an accountant to check the figures

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