HMRC mileage rate is now 55p: what self-employed trades can claim

What changed on 6 April 2026

If you are self-employed you can claim a flat rate for each business mile instead of adding up what your vehicle actually costs to run. HMRC calls this simplified expenses. For the 2026-27 tax year the rate for cars and goods vehicles, which includes vans, went up for the first time in fifteen years.

• Cars and vans, first 10,000 business miles in the tax year: 55p a mile (was 45p)
• Cars and vans, every business mile after 10,000: 25p a mile (unchanged)
• Motorcycles: 24p a mile (unchanged)

What it is worth to a trade business

Most of the gain sits in the first 10,000 miles, so the typical sole trader driving between jobs and merchants sees the full 10p a mile increase. You can run your own figures in our mileage allowance calculator.

Remember the claim reduces your profit rather than coming back to you as cash. As a basic rate taxpayer you pay 20% income tax and 6% Class 4 National Insurance on profit, so every £1 of extra expense saves about 26p.

• 5,000 business miles: £2,750 claim, up from £2,250. About £130 less tax.
• 8,000 business miles: £4,400 claim, up from £3,600. About £208 less tax.
• 14,000 business miles: £6,500 claim (10,000 at 55p plus 4,000 at 25p), up from £5,500. About £260 less tax.

Who can use the flat rate

Sole traders, and partnerships where none of the partners is a company. Limited companies cannot use simplified expenses. If you trade through a limited company, mileage in your own vehicle is claimed from the company instead, under the separate rules for employees.

The flat rate covers the running costs: fuel, insurance, servicing, repairs and road tax. Parking and other travel, such as train fares, can still be claimed on top.

The van decision you only get to make once

This is the part that matters most for trades. HMRC says you cannot use the flat rate for a vehicle you have already claimed capital allowances on, or whose cost you have already included as an expense. And once you use the flat rate for a vehicle, you must keep using it for as long as you use that vehicle in the business.

So a van you bought and wrote off against profit in the year you bought it stays on actual costs until you sell it. A van you have never claimed for can go either way, and the higher rate makes the flat rate more attractive than it was, especially for high mileage in a van that is cheap to run.

If you are about to buy a van, work out both routes before the first tax return that includes it. The van tax calculator covers the company side, and GOV.UK has a simplified expenses checker. For a big purchase it is worth ten minutes with your accountant.

What counts as a business mile

Business miles are journeys you make for the business, not the ordinary trip to a permanent base you go to every day.

• Counts: driving between jobs, to merchants and suppliers, and out to price up work
• Counts: driving to a site you are working on for a limited period
• Does not count: commuting to a yard or workshop that is your permanent base
• Does not count: personal trips, even in the work van

Keep a log as you go

Record the date, where you started, where you went, why, and the miles, for every business trip. A log reconstructed from memory at year end is the first thing that falls apart if HMRC asks questions, and if you are a sole trader already in Making Tax Digital, your figures are needed every quarter rather than once in January.

Keep your fuel and parking receipts too, even on the flat rate. Parking is claimable on top, and receipts back up the journeys in your log.