Self Employed Mileage Rates Guide
HMRC mileage rates guide for self-employed and directors: 2026/27 55p/mile rate, simplified mileage vs actual expenses, travel logs, and limited company AMAP claims.
In one sentence
HMRC approved mileage rates (55p/mile for cars/vans up to 10,000 miles in 2026/27) allow self-employed workers and directors to claim tax-free vehicle travel costs.
Quick answer
- 2026/27 Approved Car/Van Rate: 55p per mile for first 10,000 business miles, 25p per mile thereafter
- Simplified mileage flat rate covers fuel, MOT, servicing, repairs, insurance, and depreciation
- Actual expenses method requires keeping all vehicle receipts and calculating business vs personal percentage
- Continuous detailed mileage log (date, starting point, destination, business purpose, miles) is mandatory
Self-Employed Mileage Allowance and Rates Guide
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:
| Vehicle Type | First 10,000 Business Miles | Over 10,000 Business Miles |
|---|---|---|
| Cars & Vans | 55p per mile | 25p per mile |
| Motorcycles | 24p per mile | 24p per mile |
| Bicycles | 20p per mile | 20p per mile |
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.
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.
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:
1. Simplified Mileage Method
Multiply your total annual business miles by the HMRC rate. Minimal paperwork required; you only need a detailed travel log. Once chosen for a vehicle, you must stick with this method for that vehicle until sold.
2. Actual Expenses Method
Total up all actual vehicle receipts (fuel, insurance, repairs, MOT) and calculate the percentage of miles driven for business vs personal. Requires keeping every single receipt and recording total mileage.
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/mile up to 10,000 miles.
- 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.
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:
- Date of the journey
- Starting location and destination postcodes
- Specific business purpose (e.g. client meeting, site inspection, supplier visit)
- 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 maximises your vehicle tax deductions.
Unsure whether to claim mileage or actual vehicle costs?
Book a 20-minute call with an experienced UK accountant. We will compare both claiming methods for your vehicle, review your travel logs, and optimize your Self Assessment return.
Book a call →Need help with this?
Book a call and we will explain the next steps clearly.