Flat rate expenses are a simplified method approved by HMRC for calculating certain business costs. Instead of tracking exact amounts or keeping detailed receipts, individuals can use fixed monthly or mileage rates provided by HMRC. This helps reduce administrative burden while maintaining compliant records.

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 What can Flat Rate Expenses be applied to:

Flat rate expenses apply to specific cost categories:

Working from home: Fixed monthly rate depending on hours worked from home

Vehicle use: Mileage rate for business travel using personal cars, vans, or motorcycles

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How much can you claim:

Working from Home

• if you work between 25–50 hours you can claim £10/month

• if you work between 51–100 hours, you can claim £18/month, or

• if you work over 101+ hours, you can claim £26/month

Vehicle Use 

• Car/Van45p per mile (first 10,000 miles), then 25p/mile thereafter

• Motorcycle24p per mile

These apply to business journeys only — commuting to a fixed workplace doesn’t qualify.

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 How to Apply Flat Rate Expenses in Your Tax Return

When filing your Self Assessment tax return:

• You can choose to claim these flat rates instead of actual costs (e.g. petrol receipts or energy bills)

• They are entered in the expenses section and deducted from your turnover

• HMRC doesn’t require supporting evidence for the fixed rates, but you must show your working hours or mileage records upon request

 

 Choosing Between Flat Rate and Actual Costs

You don’t have to use flat rates — if your actual business costs are higher, claiming exact expenses may reduce your taxable profit more effectively. You can assess which method suits your situation and change methods if your business circumstances change.

Who Is It For?

• New to self-employment

• No time for bookkeeping?

• Want peace of mind at tax time?

• Don’t have dedicated business premises or tools to calculate exact costs?

 

​Ready to simplify your taxes?
Learn more or speak to a professional who’ll help you choose the method that works best for your business. Your future self will thank you.