Self-Employment Guides UK — Tax, Business Setup, and Running Your Own BusinessClaiming Mileage as Self-Employed UK — Rates, Rules, and How to Claim
HMRC mileage rates for self-employed workers. How to claim mileage, the two methods compared, record-keeping requirements, and common mistakes to avoid.
If you drive for business as a self-employed worker, you could be claiming hundreds or even thousands of pounds in tax deductions. Here is how mileage claims work, which method to use, and how to keep HMRC-compliant records.
The Two Methods
You have two options for claiming vehicle costs as a self-employed person. You must choose one method per vehicle and cannot switch back and forth.
Method 1: Simplified Mileage (Flat Rate)
| Vehicle | First 10,000 miles | After 10,000 miles |
|---|
| Car or van | 45p per mile | 25p per mile |
| Motorbike | 24p per mile | 24p per mile |
| Bicycle | 20p per mile | 20p per mile |
These rates are designed to cover all running costs: fuel, insurance, road tax, MOT, servicing, repairs, and depreciation. You cannot claim any of these costs separately on top of the mileage rate.
Method 2: Actual Costs
Claim the actual costs of running your vehicle, proportioned to business use.
| Claimable costs | Examples |
|---|
| Fuel | Petrol, diesel, electricity |
| Insurance | Annual premium |
| Road tax | Annual cost |
| MOT | Annual cost |
| Servicing and repairs | All maintenance |
| Breakdown cover | Annual membership |
| Lease or hire payments | Monthly cost |
| Depreciation / capital allowances | For purchased vehicles |
| Parking and tolls | Business journeys only |
You then calculate the business use percentage based on your mileage:
| Total annual mileage | Business miles | Business use % | Claimable |
|---|
| 12,000 | 8,000 | 67% | 67% of total costs |
| 15,000 | 5,000 | 33% | 33% of total costs |
Which Method Is Better?
| Simplified mileage is better if | Actual costs are better if |
|---|
| You drive a cheap, reliable car | You drive an expensive car with high running costs |
| Your annual costs are low | Your fuel and maintenance costs are high |
| You want simple record keeping | You are comfortable tracking all receipts |
| You drive fewer than 10,000 business miles | You drive many business miles in an expensive vehicle |
| You are unsure or just starting out | You have a leased or financed vehicle |
Comparison Example
| Simplified mileage | Actual costs |
|---|
| Business miles | 8,000 | 8,000 |
| Total miles | 12,000 | 12,000 |
| Business % | — | 67% |
| Mileage claim | 8,000 × 45p = £3,600 | — |
| Total car costs | — | £5,000 |
| Actual costs claim | — | £5,000 × 67% = £3,350 |
| Better option | Simplified (£3,600) | — |
In this example, simplified mileage wins. But if total car costs were £7,000 (for example, a newer or more expensive vehicle), actual costs would be £4,690, making it the better choice.
What Counts as a Business Journey?
| Business travel (claimable) | Not business travel (not claimable) |
|---|
| Travelling to a client’s premises | Commuting from home to a regular workplace |
| Visiting suppliers or wholesalers | Personal trips |
| Travelling between work sites | Travelling to and from your permanent office |
| Going to the bank for business | |
| Attending business meetings | |
| Travelling to training courses | |
| Collecting business supplies | |
The Home Office Rule
If your home is your main place of work (and you are genuinely based there, not just working from home occasionally), then journeys from home to client sites and temporary workplaces are business travel.
Record Keeping
What to Record for Each Journey
| Information | Why |
|---|
| Date | When the journey was made |
| Start and end location | Where you travelled from and to |
| Purpose | Why it was a business journey |
| Miles | Distance travelled |
| Running total | Cumulative business miles for the year |
How to Track
| Method | Pros | Cons |
|---|
| Mileage tracking app (e.g. MileIQ, Driversnote) | Automatic GPS tracking, easy to export | Monthly subscription cost |
| Spreadsheet | Free, customisable | Manual entry required |
| Notebook | Simple, no tech needed | Easy to forget, harder to total up |
| Google Maps history | Can verify distances after the fact | Not a formal mileage log |
Keep records for at least 5 years after the 31 January Self Assessment deadline for that tax year.
Claiming on Your Tax Return
| Step | Action |
|---|
| 1 | Total up your business miles for the tax year |
| 2 | Calculate: first 10,000 miles × 45p + remaining miles × 25p |
| 3 | Enter the total in the vehicle expenses section of your Self Assessment |
| 4 | If using actual costs, enter the business proportion of your total costs instead |
Example Claim (Simplified Mileage)
| Detail | Amount |
|---|
| Business miles in the year | 14,000 |
| First 10,000 × 45p | £4,500 |
| Next 4,000 × 25p | £1,000 |
| Total mileage claim | £5,500 |
| Tax saving (basic rate) | £1,100 |
| Tax saving (higher rate) | £2,200 |
Common Mistakes
| Mistake | What to do instead |
|---|
| Claiming commuting as business travel | Only claim genuine business journeys |
| Not keeping a mileage log | Record every business journey with date, purpose, and miles |
| Claiming mileage AND actual costs | Choose one method per vehicle |
| Forgetting to claim | Many self-employed people under-claim — track everything |
| Switching methods year to year | Once you use actual costs for a vehicle, you can switch to simplified only when you change vehicle |
| Claiming 45p for all miles | Only the first 10,000 business miles are at 45p — the rest are at 25p |
Parking, Tolls, and Congestion Charges
| Cost | Claimable? |
|---|
| Business parking | Yes (both methods) |
| Business tolls | Yes (both methods) |
| Congestion charge (business journey) | Yes (both methods) |
| Parking fines | No |
| Speeding fines | No |
| Home parking costs | No |
Parking and tolls are claimable on top of the simplified mileage rate — they are separate costs.
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