Business mileage claims in the UK: approved rates, records and common mistakes

Mileage is one of the most claimed and most disputed business expenses. It is easy to claim too little because nobody kept a log, and easy to claim too much because personal journeys crept in. HMRC's approved rates make it simple, but only if you understand what counts as business travel, which method you are using and what records to keep. This guide covers all of it for sole traders, partners, employees and company directors.

The approved mileage rates

For cars and vans, the approved rates are:

Vehicle	Rate per business mile
Car or van, first 10,000 miles in the tax year	45p
Car or van, after 10,000 miles	25p
Motorcycle	24p
Bicycle	20p

There is also an additional 5p per mile for each passenger who is carried on a business journey. The rates are meant to cover fuel, insurance, repairs, servicing, depreciation and other running costs in one go. Our mileage calculator works out any claim.

Who can use them

Sole traders and partners can use the rates as a simplified expense instead of calculating actual vehicle costs.

Employees who use their own vehicle for work can be reimbursed by their employer at up to the approved rate with no tax or National Insurance to pay. If the employer pays less than the approved rate, the employee can claim tax relief on the difference.

Company directors are treated as employees for this purpose. Their company can reimburse business mileage at the approved rates, and the company deducts the cost. This is a tidy, tax-free way to recover the costs of using a personal car for business.

Simplified mileage versus actual costs

A self-employed person has to choose between two ways of claiming vehicle costs.

Simplified expenses. Claim the approved rate for every business mile. No other vehicle costs, and no capital allowances on the vehicle, can be claimed.

Actual costs. Claim the business proportion of the real running costs, such as fuel, insurance, repairs and servicing, plus capital allowances on the purchase of the vehicle.

You must choose one method for each vehicle, and in general you should stay with it for as long as you use the vehicle. Switching can lead to complications with capital allowances.

Which is better? Simplified mileage is easier, and often better for older, cheaper or fuel-efficient cars and for lower mileage. Actual costs, with capital allowances, can be better for expensive cars, high running costs or modest business mileage in a costly vehicle, and for electric vehicles where the capital allowance can be substantial. It is worth running the numbers in the first year with your accountant.

What counts as business mileage

Business mileage is travel that is necessary for the business, such as:

• Travelling to meet clients or suppliers
• Collecting stock or materials
• Travelling between business sites
• Travelling to a temporary workplace
• Delivering goods
• Going to the bank, post office or training courses for business

It does not include ordinary commuting between your home and a permanent workplace, nor private journeys. If you work from home, travel from home to a client or to a temporary place of work is generally business mileage, because your home is a business base. A temporary workplace is one you expect to attend for less than 24 months, and for a period of less than 40% of your working time.

Keeping a mileage log

HMRC expects a log supporting your claim. For each journey record:

• The date
• Where you started and ended
• The purpose of the journey
• The number of miles
• Odometer readings at the start and end of the tax year, so that business and private miles can be reconciled

A simple spreadsheet or phone app is enough. Many accounting packages and tracking apps record mileage automatically using GPS, which produces a reliable log with little effort. Without a log, a claim is difficult to defend.

Company cars and director's own cars

If a company provides a car to a director or employee for private use, there is a taxable benefit based on the car's list price and emissions, and a fuel benefit if the company pays for private fuel. That is a different regime from mileage allowances and is outside the scope of this post. If you use your own car for company business, claim mileage from the company at the approved rate and record the payments as director's expenses, not through the director's loan account. See our guide to limited company bookkeeping.

Electric vehicles

For simplified mileage claims, the rates are the same regardless of the fuel type. Charging at home is harder to evidence for company cars, and different rules and advisory rates apply to fuel for company cars. If you use an electric car for self-employed business, compare the capital allowance route with the flat rate, because a first-year allowance on a new electric car can be much larger than the flat rate over the first years.

A worked example

A self-employed electrician drives 14,000 business miles in a van.

• First 10,000 miles at 45p = £4,500
• Remaining 4,000 miles at 25p = £1,000
• Total claim = £5,500

With a marginal combined rate of income tax and Class 4 National Insurance of 26%, the tax saving is about £1,430. If instead the van had actual running costs of £6,200 and 90% business use, the claim would be £5,580 before capital allowances, a similar number, but with more record keeping.

Recording mileage in the books

Record the claim as a vehicle expense category, for example "Car, van and travel". For a sole trader using simplified mileage, post a single entry at the end of each month or quarter, based on the log, so that Making Tax Digital quarterly updates reflect it. For a company, post the reimbursement as a director or employee expense. Our receipt and expense capture and monthly bookkeeping services both include mileage.

Common mistakes

• Claiming commuting miles
• Claiming mileage and fuel receipts for the same vehicle
• Claiming both simplified mileage and capital allowances
• Not keeping a log
• Forgetting to record the odometer at the start and end of the tax year
• Mixing up the 10,000-mile threshold across tax years
• Claiming mileage for a company car with private use

Making the log effortless

The best mileage log is the one that fills itself in. Many phone apps record journeys automatically using GPS and let you classify each as business or private with a swipe, then export a report for your accountant. If you prefer a manual log, keep a small notebook in the vehicle and write each trip down immediately, including the odometer reading. At the end of each month, total the business miles and post the claim to your books, so that your quarterly Making Tax Digital figures are accurate. Spending thirty seconds per journey is far cheaper than trying to reconstruct a year of trips from a diary.

Frequently asked questions

What is the HMRC mileage rate in 2026/27?

45p per mile for the first 10,000 business miles and 25p after for cars and vans, 24p for motorcycles and 20p for bicycles.

Can I claim mileage and fuel?

No. The approved rate covers fuel and other running costs, so you cannot claim both for the same vehicle.

Do I need a mileage log?

Yes. HMRC expects a record of each journey supporting the claim.

Can my limited company pay me mileage?

Yes, at the approved rates tax-free, for business journeys in your own vehicle.

Can you help me keep mileage records?

Yes. We process mileage claims monthly. Get an instant quote.