If you use your own car or van for business as a self-employed person, the mileage allowance is one of the simplest expenses you can claim — but it’s also one that many people either under-claim or get wrong. For the 2026-27 tax year, the mileage allowance for the self-employed has changed meaningfully: the rate for cars and vans for the first 10,000 business miles has risen from 45p to 55p per mile, the first increase since 2011.

That’s a 22% jump, and for anyone doing a reasonable volume of business driving, it makes a real difference to the tax relief available. In our experience, though, a surprising number of self-employed people either aren’t claiming mileage at all, or are claiming it without the records to back it up — which creates a problem if HMRC ever takes a closer look.

This post covers the current rates, how the simplified expenses method works versus tracking actual vehicle costs, and the record-keeping HMRC actually expects to see.

From 6 April 2026, the approved mileage rates for self-employed individuals using their own vehicles for business travel are as follows:

The headline change is the car and van rate for the first 10,000 miles, up from 45p to 55p. If you drive 8,000 business miles in a tax year, that’s an extra £800 of allowable expense compared to the previous rate — which, for a basic-rate taxpayer, translates to around £160 less tax. For higher-rate taxpayers, the benefit is larger still.

The over-10,000-mile rate for cars and vans remains at 25p per mile. The motorcycle and bicycle rates are unchanged at 24p and 20p respectively. These rates apply to the 2026-27 tax year, which runs from 6 April 2026 to 5 April 2027, and they apply whether you’re using simplified expenses on your Self Assessment or receiving mileage payments as an employee.

For most self-employed people, the simplified expenses (flat rate mileage) method is the right choice — but it’s worth understanding what it means before you commit, because once you start using it for a particular vehicle, you can’t switch to actual costs for that vehicle later.

Simplified expenses (mileage rate)

You claim the HMRC flat rate per business mile and nothing else for that vehicle. No separate claims for fuel, insurance, road tax, servicing, or depreciation. Simple, low admin, and the new 55p rate is genuinely generous for most vehicles. This is the approach we typically recommend for self-employed individuals who use a car that also serves personal use, because separating actual business costs from private ones is administratively messy and rarely produces a better outcome unless the vehicle is used almost exclusively for business.

Actual costs method

You track every vehicle expense — fuel, insurance, servicing, repairs, road tax, breakdown cover — and apportion the business element based on your business mileage as a proportion of total mileage. If you use traditional accounting and bought the vehicle specifically for business, you may also be able to claim capital allowances on the purchase price. This method can produce a higher deduction for certain vehicles (typically high fuel-consumption or high-cost vehicles driven heavily for business), but it requires meticulous records and a consistent approach to the business-use calculation.

One important constraint: if you’ve already claimed capital allowances on a vehicle, you cannot then switch to simplified expenses for it. The two methods are mutually exclusive per vehicle.

This is where people sometimes trip up, and it’s worth being clear. Not every mile you drive in connection with work qualifies as a business mile for mileage allowance purposes.

You can claim for:

• Travel from your business premises (or home, if you work from home) to a client, customer, or job site
• Travel between two different work locations in the same day
• Travel to a temporary workplace or project site that isn’t your regular base
• Business errands — collecting supplies, banking, attending relevant training

You cannot claim for:

• Commuting from home to a permanent fixed workplace — this is ordinary commuting and is not an allowable expense
• Personal journeys, even in a vehicle you also use for business
• Parking fines, speeding fines, or any other penalty charges

The home-to-work rule catches some people out, particularly those who work from home part of the time. If you genuinely work from home — meaning your home is your primary place of business — then travel to a client site is a business journey. But if you have a separate office or studio you commute to, those journeys don’t qualify regardless of whether you also use the car for legitimate business trips.

Beyond mileage, you can also claim for train, bus, and taxi fares on business trips, and for hotel accommodation and meal costs on genuine overnight business stays — these sit alongside, not within, the mileage allowance calculation.

HMRC does not take mileage claims on trust. If they open an enquiry into your tax return and you can’t produce a contemporaneous mileage log — meaning records kept at the time, not reconstructed later — they are within their rights to disallow the claim entirely.

Bank statements showing fuel purchases are not sufficient on their own. They confirm you bought fuel; they say nothing about which journeys were business-related, what the purpose was, or how many miles were involved. We’ve seen cases where HMRC has removed years’ worth of mileage claims because no log existed, and that’s an uncomfortable and expensive position to be in.

A proper mileage log doesn’t need to be elaborate. It should record, for each journey: the date, the start and end location, the purpose of the trip, and the number of miles. A spreadsheet works fine. So does a mileage tracking app — there are several that use your phone’s GPS to log journeys automatically, which then makes it straightforward to tag each trip as business or personal.

Our practical recommendation: get into the habit of logging every business journey at the time, or on the same day. Trying to reconstruct six months of mileage from memory and a diary is both inaccurate and time-consuming, and the result rarely holds up to scrutiny if HMRC asks questions.