How to Claim Mileage Expenses as a UK Self-Employed Person

If you use a vehicle for business purposes as a self-employed person, you can claim the cost of those journeys against your taxable profits. HMRC allows two methods: the simplified mileage allowance or actual vehicle costs. Most self-employed people find the mileage allowance simpler and often more generous.

HMRC Approved Mileage Rates

Under the simplified mileage allowance (also called Approved Mileage Allowance Payments or AMAPs when used by employers), the rates are: cars and goods vehicles — 45p per mile for the first 10,000 business miles in the tax year, then 25p per mile above 10,000 miles. Motorcycles — 24p per mile. Bicycles — 20p per mile. These rates are designed to cover fuel, oil, tyres, servicing, insurance, and depreciation. You cannot separately claim any of these costs if you use the mileage allowance.

What Counts as a Business Journey?

A business journey is travel that is wholly and exclusively for business purposes. This includes visiting clients or customers, travelling to a temporary workplace, journeys to collect business supplies, and travel between two workplaces. It does not include your ordinary commute from home to a regular fixed workplace (this is personal travel), travel for personal reasons, or the personal portion of any dual-purpose journey.

The Fixed Workplace Problem

If you are self-employed and work from a single location (say, a rented workshop), travel from home to that location is typically treated as commuting and is not deductible. However, if your home is your place of business and you travel to see clients or attend temporary sites, those journeys are fully deductible.

Keeping a Mileage Log

HMRC requires you to keep adequate records of business mileage. A mileage log should record: the date of each journey; the start and end location; the reason for the journey; the number of miles. You should also record your odometer reading at the start and end of the tax year to establish total miles, helping demonstrate the business proportion. Mileage tracking apps such as MileIQ, TripLog, or the built-in logging features in accounting software make this straightforward.

Choosing Between Mileage Rate and Actual Costs

You must choose your method at the start and stick with it for the life of each vehicle in your business. You cannot switch between methods for the same vehicle. The mileage rate is often better for higher-mileage lower-cost vehicles. The actual costs method may be better for low-mileage high-value vehicles, particularly electric vehicles where running costs are low but capital value is high. Work through the numbers for your specific situation, ideally with your accountant.

Passenger Payments

If you carry an employee or fellow worker as a passenger on a business journey and they also need to make the trip, you can claim an additional 5p per mile per passenger on top of the standard mileage rate. This only applies to employees accompanying you — not to clients or customers.

Actual Costs Method

If you use the actual costs method, you claim the business proportion of all vehicle running costs: fuel, oil, tyres, servicing, insurance, road tax, and an element of depreciation (through capital allowances on the vehicle's purchase price). The business proportion is your business miles divided by total miles in the year. Keep all fuel receipts and servicing invoices.