Key points
- Simplified mileage: 55p a mile for the first 10,000 business miles in the year, 25p after that, from 6 April 2026 (it was 45p).
- Actual costs: the business share of fuel, insurance, repairs, tax and finance, plus capital allowances on the car.
- Once you choose a method for a car, you must keep it for as long as you use that car in the business.
- Commuting to a permanent workplace is not business mileage. Keep a mileage log.
Two methods
Simplified mileage
- 55p a mile up to 10,000 miles, 25p after.
- Covers fuel, insurance, repairs, servicing and depreciation.
- Parking and tolls can be claimed on top.
- Simple: you only need a mileage log.
Actual costs
- All running costs × your business use percentage.
- Plus capital allowances on the car, based on its CO2 emissions.
- Better for expensive cars with high business use.
- Needs receipts for everything, and a log to prove the percentage.
What counts as business mileage
- Yes: visits to clients, suppliers and sites; trips between workplaces; travel to a temporary workplace.
- No: home to a permanent office or shop and back (commuting); private trips, even if you stop for business on the way.
If you work from home, trips from home to clients are usually business. A mileage log with dates, destinations, purpose and miles is what HMRC asks for in a check.
An example
A self-employed electrician drives 12,000 business miles a year. Simplified mileage: 10,000 × 55p + 2,000 × 25p = £6,000. His car costs £5,500 a year to run, with 75% business use: £4,125 plus capital allowances. Mileage gives the higher claim, without the receipts.
If you have a company
Different rules apply. A company car brings a benefit in kind charge, often high unless the car is electric. Using your own car and claiming mileage from the company at 55p tax-free is often simpler. See paying yourself from your company.
Mileage or actual costs?
What to prepare
0 of 4 ready
One piece of advice
Start a mileage log from the first business trip. It takes a minute a day, and it is the one document that decides your car claim if HMRC ever asks.
Test yourself
1. What is the simplified mileage rate for the first 10,000 miles from April 2026?
It rose from 45p to 55p from 6 April 2026.
2. You drive from home to your own shop every day. Is that business mileage?
Travel to a permanent workplace is commuting.
3. Can you switch from mileage to actual costs for the same car next year?
The method is fixed for as long as you use that car.
4. With simplified mileage, can you also claim parking?
Parking and tolls are claimed on top.
Law and sources
- GOV.UK: simplified expenses for vehiclesFlat rates for the self-employed
- GOV.UK: increasing mileage rates55p a mile from 6 April 2026
- Income Tax (Trading and Other Income) Act 2005, sections 94C to 94IThe law on simplified vehicle expenses
- HMRC Business Income Manual BIM75005Simplified expenses guidance
This guide explains the rules in general terms as at 5 October 2026. It is not advice for your situation. Rules and rates change.
