Car, van and travel expenses
for sole traders

Car, van and travel expenses are, for most sole traders, the biggest category after stock. It covers the cost of running a vehicle for business, or the simplified mileage rate instead, and every other business journey: train and bus fares, taxis, flights, hotels and meals on overnight trips. The line that matters most is between business travel and commuting, and the second is between the flat rate and actual costs, which you cannot mix for the same vehicle.

What goes in this category

• Vehicle insurance, repairs, servicing, fuel, parking, hire charges, vehicle tax and breakdown cover, for the business share of the vehicle.
• The simplified mileage rate instead of those running costs: 55p a mile for the first 10,000 business miles in 2026/27, then 25p.
• Train, bus, tram, air and taxi fares for business journeys.
• Hotel rooms and meals on overnight business trips.

What does not

• Travel between home and a permanent workplace, which is commuting.
• Private motoring, and the private share of a vehicle used for both.
• Parking fines, speeding fines and other penalties.
• The cost of buying a car, which goes through capital allowances.

Items in this category

Flat rate or actual costs

For each vehicle you choose between the simplified mileage rate and the actual running costs. The flat rate covers fuel, insurance, repairs, road tax and depreciation, so none of those can be claimed as well; parking, tolls and fares still can. Actual costs need every receipt and a record of private use, and the vehicle itself is claimed through capital allowances (or, for a van on the cash basis, as an expense). Once you use the flat rate for a vehicle, you keep it for that vehicle.

Leased cars and the 15% restriction

If you lease or hire a car, the rental is a travel cost, but for a car first leased on or after 6 April 2021 with CO2 emissions over 50g/km, 15% of the rental is disallowed. The restriction does not apply to vans or to low-emission cars. The SA103F notes and HMRC's Business Income Manual (BIM47714) explain how to work it out.

Taxi drivers and hauliers

If you are a taxi or minicab driver, or in road haulage, HMRC asks you to put fuel in cost of goods sold (box 17) rather than in travel costs. It is still allowable; it is simply treated as a direct cost of the service you sell. Everything else about the vehicle follows the normal travel rules.

Hire cars and occasional vehicles

If you hire a car or van for a business trip, the hire charge and fuel for that trip are allowable travel costs, even if you use the mileage rate for your own vehicle on other journeys. The mileage rate applies to vehicles you use regularly; a one-off hire is claimed at its actual cost. Keep the hire agreement with the receipts. A car hired for a holiday that includes a business meeting is only partly allowable, for the business element you can identify, and the rule for leased cars with CO2 emissions over 50g/km (a 15% restriction) applies to longer hires too.

Travel for landlords

Landlords claim travel for the letting business in the property pages, not here. Trips to inspect a property, meet contractors or deal with tenants are allowable if made wholly for the letting business, including at the mileage rate. Those costs go in the property travel costs category, which is box 29 on the UK property pages. If you are both a sole trader and a landlord, keep the two sets of journeys apart, because each business claims only its own travel.

Worked example: a plumber’s travel costs

A plumber uses the flat rate for his van and drives 11,000 business miles in 2026/27: 10,000 x 55p + 1,000 x 25p = £5,750. He also pays £420 in parking at jobs and £160 in train fares to a trade show, bringing his travel costs to £6,330. He cannot also claim the van's diesel or insurance, because the flat rate already covers them.

Four questions before a cost goes here

1. Was it for the business, and only for it? A cost must be incurred wholly and exclusively for the trade. A cost with a personal purpose that cannot be separated is not allowable at all.
2. Is part of it personal? Where a business part can be identified, such as business miles or business calls, claim that part on a reasonable basis and leave the rest out.
3. Is it a running cost or something you keep? Running costs belong in the expense categories. Things you keep are capital: an expense on the cash basis (except cars), capital allowances on traditional accounting.
4. Is there a specific rule? Some costs are disallowed whatever their purpose, such as fines and client entertaining, and some have their own treatment, such as cars, which always go through capital allowances.

Trading allowance or expenses

Instead of deducting expenses, a sole trader can claim the £1,000 trading allowance against trading income. You cannot claim both, so the allowance only helps when your allowable expenses are under £1,000. If your gross trading income is £1,000 or less, the allowance covers it and you may not need to register. Once your costs pass £1,000, deducting actual expenses gives the lower profit.

This category in Making Tax Digital

Under Making Tax Digital for Income Tax, each quarterly update carries your expenses in the same 15 categories as the full self-employment pages, so this category is one line of every update. Sole traders with qualifying income over £50,000 join from 6 April 2026, falling to £30,000 from April 2027 and £20,000 from April 2028. If your turnover is under £90,000 you can send one consolidated expenses figure instead of the categories, but you still keep the records behind it. The same £90,000 limit decides whether you can use the short self-employment pages (SA103S), which ask only for total allowable expenses.

Cash basis or traditional accounting

Which accounting basis you use changes when a cost in this category counts, and sometimes whether it counts as an expense. On the cash basis, now the default, you deduct costs when you pay them and most things you buy to keep are ordinary expenses (cars being the exception). On traditional accounting, you deduct costs when you incur them and claim capital allowances for things you keep.

The disallowable column

The full self-employment pages have a second column of boxes (32 to 45) for disallowable expenses. If your accounts include something that is not allowable, such as the private share of a phone bill or client entertaining, you put the total cost in the expense box and the disallowable part in the matching box, so the tax calculation adds it back. The short pages (SA103S) simply ask for allowable expenses, so you leave the disallowable part out.

How much an allowable cost saves

Each pound of allowable expense saves a sole trader 26p at the basic rate (20% Income Tax plus 6% Class 4 National Insurance) and 42p at the higher rate, in England, Wales and Northern Ireland. Scottish Income Tax bands differ, and the sole trader tax calculator works out your own figure.

Records to keep

Keep the invoice or receipt for every cost in this category, with a note of the business purpose wherever it is not obvious, and how you worked out the business share of anything also used privately. From 6 April 2026, sole traders and landlords with qualifying income over £50,000 keep digital records and send quarterly updates under Making Tax Digital, falling to £30,000 from April 2027 and £20,000 from April 2028.

Common mistakes

• Claiming the mileage rate and the fuel for the same vehicle.
• Counting the drive to a regular workshop or shop as business travel.
• Putting parking fines in travel costs: fines are never allowable.

Every other category

The other 14 categories on the self-employment pages, in box order:

• Cost of goods sold, SA103F box 17
• Construction industry payments to subcontractors, SA103F box 18
• Wages, salaries and other staff costs, SA103F box 19
• Rent, rates, power and insurance costs, SA103F box 21
• Repairs and maintenance of property and equipment, SA103F box 22
• Phone, stationery and other office costs, SA103F box 23
• Advertising costs, SA103F box 24
• Business entertainment, SA103F box 24, disallowed in box 39
• Interest on bank and other loans, SA103F box 25
• Bank, credit card and other financial charges, SA103F box 26
• Irrecoverable debts written off, SA103F box 27
• Accountancy, legal and other professional fees, SA103F box 28
• Depreciation and loss or profit on sale of assets, SA103F box 29, disallowed in box 44
• Other business expenses, SA103F box 30

The A to Z of expenses lists every item and all 23 categories: the 15 self-employment categories and the 8 for UK property.