Is mileage
tax deductible?

Yes. A sole trader can claim business mileage at HMRC's flat rates instead of the actual cost of running a car, van or motorcycle: 55p a mile for the first 10,000 business miles in 2026/27 (45p before 6 April 2026), then 25p, and 24p for motorcycles (GOV.UK simplified expenses). Landlords can use mileage rates for journeys made wholly for the letting business.

Mileage is the simplest vehicle claim there is. Rather than adding up fuel receipts, insurance, servicing and the cost of the car itself, you keep a log of business journeys and multiply the miles by a fixed rate. For most sole traders with an ordinary car or van, the flat rate is also the more generous claim, because it bakes in depreciation that would otherwise have to come through capital allowances.

Is mileage tax deductible?

The HMRC rule

If you use the flat mileage rate for a vehicle, you cannot also claim its actual running costs or its purchase. The rule comes from Simplified expenses if you’re self-employed, Travel: mileage and fuel rates and allowances, Car, van and travel expenses.

The rates are HMRC's approved mileage rates, which sole traders and partnerships without company partners can use as simplified expenses. From 6 April 2026 the rate for cars and vans rose from 45p to 55p a mile for the first 10,000 business miles in the tax year; the rate for each mile after that stayed at 25p, and motorcycles stayed at 24p (approved mileage rates). You cannot use the flat rate for a vehicle you have already claimed capital allowances on, or one whose cost you deducted as an expense on the cash basis. Cars designed for commercial use, such as black cabs and dual-control driving school cars, are excluded, and so are bicycles: the 20p cycle rate is for payments employers make to employees, not a sole trader flat rate.

When you can claim it

• Journeys to clients, customers or suppliers, and to sites or venues you work at temporarily.
• Trips between two places of work, or from your home when your home is your business base.
• Travel to training courses, trade fairs and meetings that are for the business.
• For landlords, journeys made wholly for the letting business, such as inspections and meeting contractors.

When you cannot

• Commuting between home and a permanent workplace, such as a shop, studio or workshop you go to every day.
• Private journeys, even if you stop off on business along the way, unless the business part can be separated.
• Fuel, insurance, repairs, servicing, road tax or finance for the same vehicle, which the flat rate already covers.
• Bicycle mileage at 20p a mile: sole traders claim a bicycle’s actual costs instead.

What to claim instead

If you would rather claim actual costs, add up the vehicle's running costs for the year and claim the business share, plus capital allowances on the vehicle itself (or, for a van on the cash basis, its cost as an expense). That route can beat the flat rate for an expensive vehicle doing few miles, but it needs every receipt and a record of private use. The choice is made per vehicle, and it sticks for as long as you use 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 mileage, the deciding rule is simplified expenses for vehicles: if you use the flat mileage rate for a vehicle, you cannot also claim its actual running costs or its purchase.

Worked example: a mobile hairdresser

A mobile hairdresser drives 8,000 business miles in 2026/27 between clients' homes. At 55p a mile her claim is 8,000 x 55p = £4,400, with no fuel receipts needed. She also pays £180 in parking at clients' flats, which she claims on top. If she had driven 12,000 business miles, the claim would be 10,000 x 55p plus 2,000 x 25p = £6,000.

What counts as a business mile

A business mile is one driven for the business, not to get to where the business happens. For a sole trader based at home, the first trip of the day to a client is business travel, because home is the business base. For someone who rents a workshop and goes there every day, the drive from home to the workshop is commuting, but the drive from the workshop to a customer is business. Temporary workplaces, such as a building site you work at for a few months, count as business journeys. Where a trip mixes business and private purposes, only the business miles count.

Flat rate or actual costs: which is better?

For a typical car doing a few thousand business miles, the flat rate usually wins, because it covers depreciation and insurance that would otherwise need apportioning. Actual costs can win for an expensive van doing low mileage, or a vehicle used almost entirely for business, where capital allowances on the purchase outweigh the per-mile rate. GOV.UK's simplified expenses checker compares the two. Work it out before the first claim for a vehicle, because you cannot switch methods for that vehicle later.

Tiering across the tax year

The 10,000-mile limit applies to all your business miles in the tax year, not per vehicle or per trip. Miles 1 to 10,000 are claimed at 55p in 2026/27, and every mile after that at 25p. The count resets on 6 April. If one trip takes you over 10,000 miles, the miles before the threshold are at the higher rate and the rest at 25p. The mileage calculator splits a year of miles across the two rates for you.

Mileage and the rise to 55p

The flat rate for cars and vans was 45p a mile from 2011/12 to 2025/26. It rose to 55p for journeys from 6 April 2026, so a year of 10,000 business miles is worth £1,000 more in deductions than it was. Use the rate for the tax year the journey falls in: a trip on 4 April 2026 is priced at 45p, one on 7 April at 55p. If you use an older spreadsheet or app, check it has been updated.

If you are a landlord

Landlords can deduct vehicle running costs for journeys made wholly for the letting business, including by using mileage rate deductions (GOV.UK). Trips to inspect a let property, meet a tradesperson or view a new tenant qualify; a journey that is partly to visit friends does not. The same 55p and 25p rates apply, and the same record of dates, destinations and purpose is what supports the claim.

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.

For a landlord, it belongs in travel costs (property) (SA105 box 29 on the UK property pages), and in the matching category of a Making Tax Digital property update.

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.

Records to keep

Keep a mileage log with the date, where you went, why, and the miles for each business journey, made at the time rather than reconstructed later. A phone app that records trips is fine, as long as you can show which trips were business. Keep parking and toll receipts separately, since those are claimed on top.

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 the flat rate and fuel or insurance for the same vehicle: the rate already covers running costs.
• Counting the daily drive to a regular workplace as business mileage.
• Using 45p a mile for 2026/27 journeys: the rate for cars and vans is 55p from 6 April 2026.

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, car repairs and servicing, electric and hybrid cars, food and meals and fuel. 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.