If you use your own car or van for your business, there are different ways of working out what you may be able to claim.
Here’s what HMRC says — and why keeping good records matters.
The 2026/27 mileage rate has changed
For the 2026/27 tax year, HMRC’s simplified mileage rates for cars and goods vehicles are:
| Vehicle | Business mileage | Rate |
|---|---|---|
| Car or goods vehicle | First 10,000 miles | 55p per mile |
| Car or goods vehicle | Over 10,000 miles | 25p per mile |
| Motorcycle | All business miles | 24p per mile |
The rate for the first 10,000 miles increased from 45p to 55p per mile from 6 April 2026.
For example, if you drive 6,000 qualifying business miles during 2026/27:
6,000 × 55p = £3,300
If you drive 12,000 business miles:
- First 10,000 miles × 55p = £5,500
- Remaining 2,000 miles × 25p = £500
- Total = £6,000
Can I claim my petrol receipts as well?
This is where things can become confusing.
If you’re using HMRC’s simplified mileage method for your vehicle, the mileage rate is intended to cover the vehicle’s running costs, including fuel, insurance, repairs, servicing, vehicle tax, MOT and depreciation.
So you don’t claim the mileage rate and then add your petrol receipts on top for the same vehicle costs.
Other allowable travel costs, such as qualifying parking expenses, can be claimed separately where appropriate.
What about claiming the actual costs instead?
Simplified mileage isn’t the only option.
Depending on your circumstances, you may be able to calculate the actual allowable costs of running your vehicle and claim the business proportion.
This can include costs such as:
- Fuel
- Insurance
- Repairs and servicing
- Vehicle tax
- Breakdown cover
You then need to work out the proportion relating to business use.
Neither method is automatically better for every sole trader. The right approach will depend on your circumstances, your business mileage and the costs of running your vehicle.
HMRC provides a simplified expenses checker which can help you compare the two approaches.
What counts as business mileage?
Being self-employed doesn’t mean that every journey you make in your car is business mileage.
Your journey needs to qualify as business travel.
For example, travelling to visit a client or travelling between business locations may qualify.
Private journeys do not.
Travel between home and work cannot normally be claimed as a business expense.
This is why keeping a clear record of your business journeys is so important.
Keep a mileage record
If you’re using simplified expenses, you need to keep records of your business mileage.
Your records should make it clear:
- The date of the journey
- Where you travelled from and to
- The reason for the journey
- The number of business miles travelled
You don’t necessarily need complicated software to do this. A simple, accurate mileage record can be enough.
The important thing is that your records support the figures you’re claiming.
A simple example
Imagine you’re a sole trader who travels to customers during the year.
You drive 8,000 qualifying business miles during 2026/27.
Using HMRC’s simplified mileage rate:
8,000 × 55p = £4,400
So £4,400 could be claimed as a vehicle expense using the simplified mileage method, assuming the journeys qualify.
You wouldn’t then add your petrol, servicing and insurance costs for that same vehicle.
Mileage or actual costs – which is right for you?
This is where it’s worth taking a little time to understand your options.
You might find yourself wondering:
- Have I recorded all my business miles?
- Am I using the correct mileage rate?
- Can I claim my fuel receipts as well?
- Would actual vehicle costs be more appropriate for me?
- Have I kept enough information to support my figures?
The answer won’t be the same for every business.
If you’re unsure which method applies to you, it’s worth checking the current HMRC guidance or getting appropriate professional help before making your claim.
Could your bookkeeping be making things harder than they need to be?
For many sole traders, business and personal expenses can easily become mixed together.
You might remember the journey but forget to record it. Or keep the fuel receipt but not the details of the business journey it relates to.
Keeping your bookkeeping up to date throughout the year can make things much easier when it comes to preparing your Self Assessment.
And if you’re spending hours trying to work out what you can and can’t claim, that may be a sign that your bookkeeping needs a little attention.
How Mays Accounting Services can help
If you’re a sole trader or small business owner and you’re unsure whether you’re recording your business expenses correctly, getting your bookkeeping in order can make things much easier when it comes to your Self Assessment.
At Mays Accounting Services, I help sole traders and small businesses keep their bookkeeping organised and their records up to date, so they can spend less time worrying about the numbers.
If you’d like some help getting your bookkeeping under control, get in touch.
Mays Accounting Services
Making accounting simple, so you can focus on your business.
HMRC guidance
This Insight is based on current HMRC guidance. Tax rules can change, so always check the latest HMRC information relevant to your circumstances.
HMRC – Simplified expenses: vehicles
https://www.gov.uk/simpler-income-tax-simplified-expenses/vehicles
HMRC – Expenses if you’re self-employed: car, van and travel expenses
https://www.gov.uk/expenses-if-youre-self-employed/travel
HMRC – Simplified expenses
https://www.gov.uk/simpler-income-tax-simplified-expenses