When you're self-employed and use your personal vehicle for business travel, HMRC allows you to claim mileage as a deductible expense using a flat rate allowance. This method is simple, efficient, and covers most of your vehicle’s running costs—without needing to track fuel receipts, servicing bills, or insurance paperwork.

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What Does the Flat Rate Cover?

HMRC’s mileage allowance is designed to cover:

• Fuel

• Insurance

• Road tax

• Servicing and repairs

• MOTs

• Vehicle wear and tear

These are all bundled into a fixed per-mile rate, meaning you don’t need to record or claim each cost individually.

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However, the flat rate does not cover:

• Parking fees

• Congestion charges or tolls

• Fines or penalties
  These may still be claimed separately if they were incurred during business travel.

 

What Are the Approved Mileage Rates?

• Cars and Vans: 45p per mile for the first 10,000 miles per tax year, then 25p per mile thereafter

• Motorcycles: 24p per mile

• Bicycles: 20p per mile

Once you opt for the flat rate method for a particular vehicle, you must use it consistently and cannot switch to claiming actual costs for that same vehicle later on.

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When Should You Start Tracking Mileage?

You should begin recording mileage as soon as you start using a personal vehicle for work-related travel. Eligible journeys include:

• Travelling to client meetings

• Visiting job sites

• Attending training courses or trade events

• Driving between temporary work locations

Note: Commuting between home and a permanent workplace is not allowable.

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 What Should You Record?

To keep your mileage claim compliant, log the following for every business journey:

• Date of travel

• Start and end locations

• Purpose of the trip

• Number of miles travelled

• Type of vehicle used

• (Optional) Odometer readings for accuracy

These records should be clear, truthful, and stored securely for at least five years after the tax return deadline, as HMRC may request them.

📂 How Can You Keep Mileage Records?

You can choose a method that works best for you:

• A paper logbook

• A spreadsheet (Excel or Google Sheets)

• Mileage tracking apps

Regardless of the method, consistency and completeness are key.

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How It Applies to Your Tax Return

When filing your Self Assessment tax return, you’ll:

1. Add up the total number of business miles driven

2. Multiply by the applicable flat rate

3. Enter the result in the expenses section of your tax return

This figure reduces your taxable profit and can help lower your tax liability efficiently, without the complexity of calculating individual costs.

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If you need more information, or you are not sure if the flat rate is good for you, just let us know and we can arrange for a free consultation