Self-employed mileage allowance: 2026/27 rates

Self-employed mileage allowance: the short answer

For 2026/27, a sole trader can claim 55p per business mile for the first 10,000 miles in a car or van, then 25p per mile after that. Motorcycles are 24p per mile. You claim it instead of fuel, insurance, repairs and the other running costs of that vehicle.

From 6 April 2027, Budget 2026 raises the rate above 10,000 miles from 25p to 35p, and makes the 55p rate permanent. The change still needs to pass in the Finance Bill.

If you use a car, van, motorcycle, or bicycle for business journeys in the UK, claiming vehicle expenses is one of the most effective ways to lower your taxable profits on your Self Assessment tax return.

HMRC offers two distinct methods to claim vehicle costs: HMRC Simplified Mileage Allowance (flat rate per mile) or Actual Vehicle Expenses.

2026/27 HMRC Approved Mileage Rates

Under HMRC simplified expenses, you claim a fixed rate for every business mile driven:

Note: From 6 April 2026, HMRC increased the initial car and van rate from 45p to 55p per mile for the first 10,000 business miles. GOV.UK lists simplified expenses for cars, goods vehicles (vans) and motorcycles. The 20p bicycle rate is the approved rate for employees using their own bike, so a sole trader claiming for a bicycle uses actual costs.

Car allowance mileage rates: self-employed, employees and company payments

Car rates are 55p for the first 10,000 business miles in the tax year and 25p after. Before 6 April 2026 the first 10,000 miles were 45p, so the 2023/24, 2024/25 and 2025/26 claims use 45p and 25p. For National Insurance, the approved rate for cars in 2026/27 is 55p for all business miles. Sources: GOV.UK simplified expenses and employer rates for 2026 to 2027.

How to work out your mileage claim

The sum is the same whichever way you do it: add up the business miles for each vehicle over the tax year, then multiply by the rate.

• Car, 8,000 business miles: 8,000 x 55p = £4,400.
• Car, 12,000 business miles: 10,000 x 55p = £5,500, plus 2,000 x 25p = £500, total £6,000.
• Motorcycle, 6,000 business miles: 6,000 x 24p = £1,440.
• GOV.UK's own example: 11,000 business miles is £5,500 plus £250, total £5,750.

You do not have to use flat rates for every vehicle. GOV.UK has a simplified expenses checker that compares the flat rates with your actual costs.

Include the total in your expenses on your Self Assessment return. Your mileage log is the evidence.

What does the flat-rate mileage cover?

The HMRC pence-per-mile rate is designed as an all-inclusive rate. It covers:

• Fuel and oil
• Vehicle servicing, repairs, and MOT
• Vehicle insurance and road tax (VED)
• Vehicle depreciation and capital allowances

What you can claim on top: Business parking fees, toll roads, and congestion charges are not included in the mileage rate and can be claimed separately as allowable business expenses.

Petrol and fuel expenses: can you claim fuel as well?

With simplified mileage, fuel is already included in the flat rate. You cannot claim petrol or diesel receipts on top for the same vehicle.

With the actual costs method, fuel is one of the vehicle costs you can claim, alongside insurance, repairs and servicing, vehicle tax, parking and breakdown cover. Only the business share counts.

You can claim business parking and other travel costs, such as train, bus and taxi fares, on top of either method.

Employees using their own vehicle claim the approved rate. They cannot claim separately for fuel, vehicle tax, MOTs or repairs.

For a company car, an employee can claim tax relief on fuel used for business trips, using the actual fuel cost. Employers reimbursing company car fuel can use HMRC's advisory fuel rates, which apply to company cars only.

Simplified Mileage vs Actual Vehicle Expenses

Self-employed sole traders can choose between simplified mileage or actual expenses when first introducing a vehicle into the business:

Worked example: flat rate or actual costs?

A sole trader drives 15,000 miles in the year, 9,000 of them for business (60%). The figures below are illustrative.

Here the flat rate is higher. A newer or more expensive car, or heavy running costs, can reverse that. If you buy the car and claim capital allowances, you cannot then use the flat rate for it, so decide before you claim. At a 20% Income Tax rate, £4,950 of expenses saves £990 of Income Tax, and it also reduces profit for National Insurance.

Where do I enter mileage on a Self Assessment return?

Sole traders include the mileage total with their car, van and travel expenses in the self-employment pages. Keep the log as evidence. Employees who file a tax return claim mileage allowance relief through the return instead of the online job expenses service. Those who do not file one can claim through GOV.UK, and must send mileage logs showing the reason for each journey and the start and end postcodes.

Example for an employee: 8,000 business miles at the 55p approved rate is £4,400. The employer pays 30p a mile, £2,400. The shortfall is £2,000, so the employee can claim relief on £2,000. At 20% that is £400 off the tax bill.

Mileage rules for Limited Company Directors

If you run a limited company and drive your personal car for business trips:

• Your limited company can pay you tax-free Approved Mileage Allowance Payments (AMAP) at 55p per mile for the first 10,000 business miles and 25p per mile after that.
• The company deducts these mileage reimbursements as an allowable business expense, reducing Corporation Tax.
• If the company pays you less than the HMRC rate (e.g. 30p/mile), you can claim Mileage Allowance Relief on your personal Self Assessment return.

Which miles count as business miles?

• Business journeys include client meetings, supplier visits, site inspections and travel to a temporary place of work.
• Travel between home and your normal place of work does not count. GOV.UK says self-employed people cannot claim for it. For employees, travel to and from work is excluded unless it is a temporary place of work.
• Private trips do not count; keep them out of your business mileage log.

For other business costs, see the guide to allowable expenses for sole traders linked below.

What HMRC expects in your business mileage log

In an HMRC tax enquiry, generic estimates will be rejected. You must maintain a continuous mileage log detailing:

1. Date of the journey
2. Starting location and destination postcodes
3. Specific business purpose (e.g. client meeting, site inspection, supplier visit)
4. Exact business miles driven for that trip

Read our guide on allowable expenses for sole traders or see how our Self Assessment tax preparation service claims your vehicle costs correctly. If you are weighing up an electric car, read the electric company car tax guide.