Is parking
tax deductible?

Partly. Parking on business journeys is allowable, and you can claim it on top of the mileage rate (GOV.UK). Parking fines and penalty charges are never allowable (GOV.UK), and parking at a permanent workplace you commute to is part of the commute.

Parking is one of the few vehicle costs you can claim whichever method you use for the vehicle. The mileage rate covers the cost of running the car, not where you leave it, so parking on business journeys is added on top. The traps are fines, which are never deductible, and parking at the place you work every day.

Is parking 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.

Parking is on GOV.UK's list of allowable travel costs, and the simplified expenses guidance confirms that you can claim parking on top of the flat mileage rate (simplified expenses). Fines and penalty charges are on the list of things you cannot claim (travel expenses), and HMRC's manual treats fines as disallowable because they are imposed as a penalty for breaking the rules, not as a cost of trading.

When you can claim it

• Car park and on-street charges while visiting customers, suppliers or sites.
• Station parking when you take the train for a business trip.
• Parking at a temporary workplace, such as a site you work at for a project.
• Parking on landlords’ trips made wholly for the letting business.

When you cannot

• Parking fines, penalty charge notices and clamping fees.
• Parking on private trips, or for the personal part of a mixed journey.
• Parking at your own shop or unit that you travel to every day.
• A residents’ parking permit for your home street, unless the vehicle is used only for the business.

What to claim instead

If you receive a parking fine on a business journey, the fine itself is not deductible, but the parking you paid for is. Keep the two separate in your records so the fine does not slip into your expenses.

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 parking, 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 mobile dog groomer

A mobile dog groomer pays £640 in parking over the year at customers' homes and in town car parks, and uses the mileage rate for her van. She claims the £640 in full on top of her mileage. She also paid a £70 penalty for overstaying in a car park, which she cannot claim.

Parking with the mileage rate

The flat mileage rate replaces fuel, insurance, repairs, tax and depreciation, but it says nothing about parking, tolls or congestion charges. Those are claimed on top at their actual cost, as long as the journey was for the business. That makes parking one of the easiest costs to add, and one of the most often forgotten.

Tolls and congestion charges

Road tolls, bridge tolls and congestion or clean-air charges on a business journey are treated in the same way as parking: allowable at cost, on top of the mileage rate. The penalty for not paying a congestion charge in time is a fine, and not allowable.

Parking at your regular workplace

Travel between home and a permanent workplace is commuting, and HMRC generally treats parking there as part of the commute. If you rent space at your own premises for a vehicle used only in the business, such as a van kept at the unit overnight, that is a premises cost rather than commuting. Where the position is borderline, keep a note of why the vehicle is parked there.

Receipts and apps

Parking apps and pay-by-phone services produce receipts with the location and time, which make good records. For cash machines that do not give receipts, note the date, place and amount at the time. Small amounts add up across a year, and a consistent record makes them easy to claim.

Parking at a customer’s home or site

Tradespeople, carers and mobile beauty therapists often pay for parking outside customers’ homes, or buy daily permits in controlled zones. These are costs of the business journey and allowable in full. If a customer reimburses you for parking, include the reimbursement in your income and claim the parking as an expense, or leave both out; do not claim the expense and keep the reimbursement out of your turnover.

If you are a landlord

Landlords can claim parking on journeys made wholly for the letting business, such as visiting a property for an inspection. The cost goes in travel costs for the property business.

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.

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 parking receipts or app records showing the date, place and cost, and make sure the journey itself is recorded as business travel. Keep any fines separate so they do not end up in your expenses.

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

• Including parking fines or penalty charges in expenses.
• Forgetting to claim parking on top of the mileage rate.
• Claiming parking at your own premises on days you simply commute there.

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.