Key points
- Simplified mileage: 55p a mile for the first 10,000 business miles in the year, 25p after that, from 6 April 2026 (it was 45p). Motorcycles: 24p a mile.
- Actual costs: the business share of fuel, insurance, repairs, tax and finance, plus capital allowances on the car.
- Once you choose a method for a vehicle, you must keep it for as long as you use that vehicle in the business. If you have claimed capital allowances on it, you cannot use mileage.
- Commuting to a regular place of work is not business mileage. Keep a mileage log made at the time.
Two methods
Simplified mileage
- 55p a mile up to 10,000 miles, 25p after.
- Covers fuel, insurance, repairs, servicing and depreciation.
- Parking and tolls can be claimed on top.
- Simple: you only need a mileage log.
- Not available for a vehicle that has already had capital allowances.
Actual costs
- All running costs × your business use percentage.
- Plus capital allowances on the car, based on its CO2 emissions.
- Better for expensive cars with high business use.
- Needs receipts for everything, and a log to prove the percentage.
The government has said it will review all mileage rates, with the outcome to be set out at a future Budget. We will update this guide if they change.
Which vehicles can you claim for?
You can claim for cars, vans and other goods vehicles, and motorcycles (including scooters) that you use in your business.
| Vehicle | First 10,000 business miles | Over 10,000 miles |
|---|---|---|
| Cars and goods vehicles (including vans) | 55p | 25p |
| Motorcycles | 24p | 24p |
Rates from 6 April 2026. You cannot use the flat rates for cars designed for commercial use, such as black cabs or dual-control driving instructor cars. For those, claim actual costs.
Who can use the flat rate?
Simplified mileage is open to sole traders and to business partnerships that have no company as a partner. Limited companies cannot use it. Directors who use their own car for company business are paid mileage by the company instead (see if you have a company).
What the mileage rate covers, and what you can add on top
The mileage rate is meant to cover all the costs of buying, running and maintaining the vehicle: fuel, oil, servicing, repairs, insurance, vehicle tax, MOT and depreciation. You cannot claim any of these separately for the same vehicle.
You can claim on top the costs of a particular business journey, such as parking, tolls and congestion charges, and other travel such as train fares. Fines and penalty charges are never allowable. Carrying passengers on a business journey does not increase your mileage rate.
Can you switch methods?
If you have ever claimed capital allowances on a vehicle, or deducted its cost as an expense when working out your profits, you cannot use the flat mileage rate for that vehicle. Once you use the flat rate for a vehicle, you must keep using it for as long as that vehicle is in your business. You can only change method when you replace the vehicle.
More than one vehicle? You do not have to use the same method for every vehicle. For example, you could use the flat rate for a car and actual costs for a van. Keep separate records for each.
What goes into actual costs
Add up the year's fuel, insurance, servicing and repairs, vehicle tax, MOT, breakdown cover and the interest on any loan or hire purchase used to buy the car. Then claim the business-use percentage shown by your mileage log.
The cost of the car itself is not an expense. You claim capital allowances instead:
| Car | Capital allowance |
|---|---|
| New, unused zero-emission car, bought by 5 April 2027 | 100% first-year allowance |
| CO2 emissions of 50g/km or less (including second-hand electric cars) | 14% a year from April 2026 (18% before) |
| CO2 emissions over 50g/km | 6% a year |
All of these are reduced by your private-use share. Cars do not qualify for the Annual Investment Allowance. If you lease a car with emissions over 50g/km, 15% of the lease rental is not allowed.
What counts as business mileage
- Yes: visits to clients, customers and suppliers; trips between places of business; travel to a client's premises or a site that is not your regular place of business.
- No: home to a permanent office, shop or other regular place of work and back (commuting); private trips.
Travel between your home and a place you work at regularly, such as a shop, a rented treatment room or a co-working space you use on set days, is commuting, even if you are self-employed. Regular, predictable trips to the same client's premises every day can be commuting too.
A journey with both a business and a private purpose does not qualify. Only journeys made for the business, or the business part of a journey, count.
If you work from home, trips from home to clients are usually business. But having an office at home does not by itself make your home your business base. What matters is the nature of your work: for example, a tradesperson who goes from home to a different, unpredictable site for each job can usually claim that travel.
What to record in your mileage log
HMRC expects a record kept at the time, or shortly after, of each business journey. For each trip, note:
- the date;
- where you started and finished;
- the purpose (for example "site visit, 14 High Street" rather than "work");
- the business miles.
Adding postcodes makes distances easy to check. A paper log, a spreadsheet or a mileage-tracking app are all acceptable if the information is complete. If you use actual costs, record your total miles for the year as well, so you can show the business percentage, and keep every receipt. Keep your records for at least 5 years after the 31 January filing deadline for the tax year.
An example
A self-employed electrician drives 12,000 business miles a year. Simplified mileage: 10,000 × 55p + 2,000 × 25p = £6,000. His car costs £5,500 a year to run, with 75% business use: £4,125 plus capital allowances. Mileage gives the higher claim, and needs a mileage log rather than receipts for running costs.
What the difference is worth in tax. A deduction reduces your taxable profit, not your tax bill pound for pound. Each extra £1,000 of allowable expenses saves £200 of Income Tax for a basic rate taxpayer and £400 for a higher rate taxpayer. It can also reduce your Class 4 National Insurance. Scottish taxpayers have different Income Tax bands.
Mileage or actual costs: which suits you?
The flat rate usually suits you if
- You drive many business miles.
- Your car is economical to run.
- You want simple records.
Actual costs may suit you if
- Your car is expensive to run or repair.
- Your business mileage is fairly low but your business-use percentage is high.
- You bought a new zero-emission car that qualifies for the 100% first-year allowance.
Work out both for the first year, because the choice then stays with that vehicle.
Common mistakes
- Claiming mileage for some trips and actual fuel for others in the same vehicle. One method per vehicle.
- Claiming the flat rate for a car you previously claimed capital allowances on.
- Counting regular trips to your own premises as business.
- Overstating the business-use percentage.
- Having no record made at the time.
An inaccurate return can lead to the claim being reduced and to penalties.
Accounts not made up to 5 April?
The rate rose to 55p from 6 April 2026. If your accounting period spans that date, for example a year ending 31 December 2026, HMRC says to work out the mileage deduction separately at each tax year's rates (45p for 2025/26, 55p for 2026/27) before apportioning profits between tax years.
If you have a company
Different rules apply. A company car brings a benefit in kind charge, often high unless the car is electric. Using your own car and claiming mileage from the company at 55p tax-free is often simpler. See paying yourself from your company.
Mileage or actual costs?
What to prepare
0 of 4 ready
One piece of advice
Start a mileage log from the first business trip. It takes a minute a day, and it is the one document that decides your car claim if HMRC ever asks.
Test yourself
1. What is the simplified mileage rate for a car for the first 10,000 miles from April 2026?
It rose from 45p to 55p from 6 April 2026.
2. You drive from home to your own shop every day. Is that business mileage?
Travel to a regular place of work is commuting.
3. Can you switch from mileage to actual costs for the same car next year?
The method is fixed for as long as you use that car.
4. You claimed capital allowances on your car last year. Can you use the mileage rate for it now?
The flat rate cannot be used for a vehicle that has had capital allowances.
5. With simplified mileage, can you also claim parking?
Parking and tolls are claimed on top.
Law and sources
- GOV.UK: simplified expenses for vehiclesFlat rates for the self-employed
- GOV.UK: increasing mileage rates55p a mile from 6 April 2026
- Income Tax (Trading and Other Income) Act 2005, sections 94C to 94IThe law on simplified vehicle expenses
- HMRC Business Income Manual BIM75005Simplified expenses guidance, records and periods spanning 6 April
- HMRC Business Income Manual BIM37620 and BIM37635Travel between home and work
- GOV.UK: expenses if you're self-employed, car, van and travelWhat you can and cannot claim
- GOV.UK: capital allowances on business carsRates and the private-use restriction
- HMRC Capital Allowances Manual CA23153100% first-year allowance for zero-emission cars
- Income Tax (Trading and Other Income) Act 2005, section 48Lease rental restriction for cars
- GOV.UK: how long to keep your recordsRecord keeping for the self-employed
This guide explains the rules in general terms as at 9 October 2026. It is not advice for your situation. Rules and rates change.
