Is car repairs and servicing
tax deductible?

Partly. Repairs and servicing of a vehicle used in the business are allowable, for the business share if it is also used privately (GOV.UK). If you use the mileage rate for the vehicle, repairs are already covered by the rate and cannot be claimed separately (simplified expenses).

Running a vehicle means servicing, tyres and the occasional expensive repair. On actual costs those are allowable as they arise, in proportion to business use. The mileage rate, in contrast, bakes them in. Keeping a clear line between a repair and an improvement matters too, because improvements are capital.

Is car repairs and servicing tax deductible?

The HMRC rule

Vehicle insurance, repairs, fuel, parking, hire, road tax and breakdown cover, fares and hotel rooms for business trips are allowable. Travel between home and work, non-business journeys, and fines are not. The rule comes from Car, van and travel expenses, Simplified expenses if you’re self-employed.

Repairs and servicing are on GOV.UK's list of allowable travel costs (travel expenses), and the SA103F notes include them in box 20 (SA103F notes). Where a vehicle is used for business and privately, the private share is disallowed. The simplified mileage rate replaces the actual costs of running a vehicle, including repairs and servicing (simplified expenses). A repair restores the vehicle to its previous condition; work that improves it, such as a conversion or a new body, is capital expenditure.

When you can claim it

• Servicing, MOT tests, tyres, brakes, bulbs and routine parts.
• Repairs after a breakdown or wear and tear.
• Valeting or cleaning a vehicle used in the business, for the business share.
• Breakdown cover and motoring organisation membership.

When you cannot

• Repairs to a vehicle whose business use you claim at the mileage rate.
• The private share of repairs to a vehicle also used personally.
• Improvements such as a conversion, racking fit-out or a new body, which are capital.
• Repairs after an accident covered by insurance, to the extent the insurer pays.

What to claim instead

The alternative to claiming the cost of a vehicle is the simplified mileage rate: 55p a mile for the first 10,000 business miles in 2026/27 (45p before 6 April 2026), then 25p (GOV.UK). It covers the vehicle's purchase, finance and running costs in one figure, so if you use it for a vehicle you do not also claim capital allowances, fuel, insurance or repairs for that vehicle.

How to decide if you can claim it

1. Was it for the business? A cost is only allowable if you incur it wholly and exclusively for the business. If it also serves a personal purpose that cannot be separated, such as clothing that keeps you warm or a meal that keeps you going, HMRC disallows it.
2. Is part of it personal? Where a cost has a business part you can identify, such as the business calls on a phone bill or the business miles in a car, you claim that part and leave the rest out, on a reasonable basis you can explain.
3. Is it a running cost or something you keep? It is a running cost, so on the cash basis it counts when you pay it and on traditional accounting when you incur it. Nothing about it needs spreading over later years.
4. Is there a specific rule? For car repairs and servicing, the deciding rule is business travel and vehicle running costs: vehicle insurance, repairs, fuel, parking, hire, road tax and breakdown cover, fares and hotel rooms for business trips are allowable. Travel between home and work, non-business journeys, and fines are not.

Worked example: a courier’s van

A courier's van needs a £1,100 clutch, a £320 service and £480 of tyres in a year. The van is used only for work, so all £1,900 is allowable. When he later spends £2,600 on racking and shelving inside the van, that is an improvement: on the cash basis it is an expense, on traditional accounting it goes through capital allowances.

Repair or improvement?

A repair puts back what was there: a new clutch, replacement tyres, a repaired dent. An improvement adds something that was not: a refrigeration unit, racking, a tail lift, a conversion. Repairs are running costs, claimable when paid or incurred. Improvements are capital, which on the cash basis are expenses (except for cars) and on traditional accounting go through capital allowances, often the Annual Investment Allowance for van equipment.

Accidents and insurance pay-outs

If the insurer pays for a repair, you cannot also claim it; if you pay the excess yourself, the excess is allowable for a business vehicle on a business journey. For an accident on a private journey, the cost is personal. Record insurance receipts against the repair so the net cost is what reaches your expenses.

MOTs and vehicle checks

An MOT is a running cost, allowable for the business share of a vehicle's use, and covered by the mileage rate like any other running cost. If you run an MOT testing business, the fees you charge customers are your income; that is a different question, covered by the MOT tester invoice template.

Keeping costs and the mileage rate apart

Many sole traders pay garage bills out of the business account while claiming the mileage rate for the same vehicle. The payment is fine, but the cost must then be recorded as drawings, not as an expense, or it will be counted twice. If you want to claim the repairs, switch the vehicle to actual costs, which you can only do before you first use the flat rate for it.

Cleaning and valeting

Cleaning a vehicle used for the business, such as washing a sign-written van or valeting a car used to carry clients, is a running cost like servicing: allowable for the business share when you claim actual costs, and covered by the mileage rate when you do not. For a taxi or chauffeur business, where presentation is part of the service, the cleaning is plainly a business cost.

Where it goes on your return and in MTD

For a sole trader, the allowable part goes under car, van and travel expenses (SA103F box 20 on the full self-employment pages). Under Making Tax Digital for Income Tax, it goes in the same category of your quarterly update, which is the category TapTax files it under when you record the cost.

If your turnover was under £90,000, you can use the short self-employment pages (SA103S), which ask for a single figure for total allowable expenses rather than a box-by-box breakdown, and the full pages let you give just a total in box 31 too. The category still matters for your own records and for Making Tax Digital, where each quarterly update uses the same categories unless you choose to send one consolidated figure.

Most sole traders now use the cash basis, the default from the 2024/25 tax year, which counts a cost when you pay it. On traditional accounting you count it when you incur it, and equipment you keep goes through capital allowances rather than expenses.

How much an allowable cost saves

The value of a deduction is the tax it removes from your profit, not the cost itself. At the basic rate a sole trader saves 26p for every pound of allowable expense, at the higher rate 42p, and in the personal allowance taper between £100,000 and £125,140 as much as 62p. Landlords pay no Class 4 on rental profit, so they save 20p or 40p.

What £1,000 of allowable expense saves a sole trader in 2026/27

• Basic rate (20% + 6%)£260
• Higher rate (40% + 2%)£420
• Additional rate (45% + 2%)£470
• Allowance taper band (60% + 2%)£620

Records to keep

Keep the purchase or finance agreement, every invoice for running costs, and a mileage log that shows business and total miles, so you can support the business percentage. For capital allowances, keep the date the vehicle was bought, its cost and, for a car, its CO2 emissions.

From 6 April 2026, sole traders and landlords with qualifying income over £50,000 keep these records digitally and send quarterly updates under Making Tax Digital, falling to £30,000 from April 2027 and £20,000 from April 2028. The MTD requirement checker shows when it applies to you.

Common mistakes

• Claiming garage bills as well as the mileage rate for the same vehicle.
• Treating a van fit-out or conversion as a repair.
• Claiming repairs the insurer has already paid for.

Related expenses

This item sits in the car, van and travel expenses category, alongside buying a car, buying a van, car insurance, car leasing and PCP, electric and hybrid cars, food and meals, fuel and hotels. The A to Z of expenses answers the same question for every other cost.

TapTax sorts each cost into the right category as you record it, applies the business share where you set one, and keeps the receipts with the figures, ready for your quarterly updates and final return.