Driving for Business? Here’s How to Claim Your Miles Back
If you’re self-employed and using your own car, van, or bike for work, you could be missing out on a valuable tax saving. HMRC’s mileage allowance lets you claim a set amount per mile instead of tracking every fuel and repair receipt.
In this guide, we’ll walk you through exactly how it works, who can claim, the rates you can use, and the records you need to keep, so you can claim with confidence and keep more of your hard-earned income. Lets get right into it!
What is the self-employed mileage allowance?
The self-employed mileage allowance is HMRC’s approved method for claiming business travel costs against your taxable profits, which reduces your business profits for tax purposes. It’s often called “Simplified Expenses” for good reason.
The flat rate mileage allowance lets you claim a set amount per mile for business journeys, making it easy to calculate your deduction. Not every self employed person or sole trader can automatically claim mileage allowance—this method is mainly for self employed people and sole traders. The allowance applies to journeys made for business purposes.
Instead of tracking every receipt for fuel, insurance and repairs, you simply multiply your business miles by the approved rate when using your vehicle for business purposes. This creates a cleaner expense record.
You claim this on your Self Assessment tax return to reduce your tax bill. The beauty is in its simplicity – fewer calculations and less paperwork!
Eligibility and Restrictions
Not every self employed person or sole trader can automatically claim mileage allowance using the simplified expenses method. To qualify, your business must operate as a sole trader or partnership and have a turnover under £85,000 per tax year. This flat per mile rate is designed to make claiming mileage allowance easier for smaller businesses, helping you avoid the hassle of tracking every fuel receipt or repair invoice.
However, there are important restrictions to keep in mind. If you’ve already claimed capital allowances for your vehicle, or if you include your vehicle in your business expenses using the actual cost method, you cannot use the simplified expenses method for that vehicle. HMRC rules prevent double-claiming, so you must choose one approach and stick with it for each vehicle.
Current mileage rates you can claim
For cars and vans, HMRC allows you to claim 45p per mile for the first 10,000 business miles in each tax year. These are approved mileage rates and are considered flat rates for tax purposes. After that, the rate drops to 25p per mile.
For cars and goods vehicles, including vans and any goods vehicle used for business, you can claim these allowances. Motorcycle users can claim 24p per mile regardless of distance covered. Cyclists haven’t been forgotten either – you can claim 20p per mile when using a bicycle. Electric vehicles are also eligible for mileage allowance at the same rates as petrol or diesel vehicles.
These rates cover all vehicle running costs including fuel, insurance, repairs, depreciation, road tax, wear and tear, servicing costs, fuel costs, motoring costs, and vehicle costs. You cannot claim these expenses separately if using the mileage method.
These are included in the flat rate mileage allowance, but you may still claim other allowable expenses such as parking fees or tolls. The total cost of running the vehicle is factored into the flat rate, simplifying your tax calculations.
