Yes, but only if you pass the dominant purpose test
Introduction:
Where the business purpose remains clear, dominant, and unbroken, HMRC permits incidental personal activity, but stray too far and you risk losing the deduction entirely.
I saw many tax enquiries involving the issues covered below. Let’s break down what qualifies and how to stay compliant.
The legal test: “wholly and exclusively” still rules the road
Mileage deductions hinge on one principle: the expense must be incurred “wholly and exclusively” for the trade or employment. This is enshrined in:
- Section 34, Corporation Tax Act 2009
- Section 54, Income Tax (Trading and Other Income) Act 2005
This means journeys must be directly tied to the performance of duties. Just being “connected” to your work won’t cut it. Courts and HMRC interpret this rule narrowly, and sometimes inconsistently.
What HMRC does and doesn’t accept
HMRC’s guidance accepts ‘minor’ personal detours don’t automatically undermine a business mileage claim. The condition is that the business purpose must remain dominant and unaltered. For example:
- Valid: Driving to a client site, stopping at a petrol station for a coffee.
- Invalid: Driving to the gym, doing your workout, and then dropping off company papers on the way home.
The key distinction? Intent and purpose at the journey’s outset, not what happens along the way.
Dual-purpose travel: no apportionment if the lines blur
HMRC does not normally allow apportionment between personal and business motives unless the business leg stands independently.
Example:
You drive to a board meeting, then detour to a nearby retail park. If the shopping stop is non-incidental and materially alters the journey, the entire claim may be disallowed.
HMRC’s “dominant purpose” test: how it’s applied
To judge whether a journey was eligible, HMRC may consider:
- What was planned and intended at the start of the journey
- Whether the business duty could have been carried out without the personal element
- If the personal activity changed the route, timing, or justification for the trip
If the business duty is clearly the reason for travel, then an incidental detour will not break eligibility. But if the personal need is core, or the business element feels tacked on, the claim may fail.
Practical guidance:
- Keep accurate mileage logs - Record dates, mileage, start/end points, and the specific business purpose. Vague entries like “client meeting” invite scrutiny.
- Don’t rely on informal apportionment - If a personal element is more than incidental, start a new journey. A clean split is safer than arguing over proportions.
- Beware of the common risks - Lunch stops and fuel breaks are usually fine. Detouring to picking up children or for errands is not. That said, if the school run happens to fall naturally along the business route, such as dropping children off at the start or collecting them on the return leg, without significant ‘deviation’, HMRC may still accept the claim. The key is whether the personal element is incidental or disruptive.
- Reassess claims if patterns emerge - Repeatedly combining shopping or school runs with business meetings may suggest the wrong primary purpose. Document intent clearly.
Compliance spotlight: 2024/25 updates
Although HMRC’s position on mileage has not materially changed in the 2024/25 tax year, scrutiny of claims has increased where hybrid working, home offices, or flexible schedules are involved.
The key risks here are:
- Misinterpreting home-to-client travel: Home qualifies as a workplace only if substantive duties are carried out there. Casual admin at home won’t qualify.
- Overclaiming due to app reliance: Many apps calculate total distance but ignore purpose. Manual review remains essential.
Be aware on these nuances, particularly where claims are recurring or significant.
Final word
Mileage claims are still permitted where a personal stop is truly incidental, but HMRC will challenge claims where the facts suggest otherwise. The test is one of purpose, not just distance.
Wherever possible, avoid mixing personal and business matters. Clear documentation, discipline, and precise descriptions will save tax, and time in an enquiry.
Thank you for reading.
