Updated for the 2026/27 tax year. From 6 April 2026, eligible self-employed people using simplified vehicle expenses can claim 55p per business mile for the first 10,000 miles and 25p per mile after that — the first rise in the headline rate in 15 years.

For most self-employed people with a car or van, mileage is one of the biggest expenses of the year — and one of the worst recorded. Here's how HMRC's simplified mileage rates work and when they beat claiming actual costs.

The 2026/27 rates

  • Cars and vans — 55p per business mile for the first 10,000 miles in the tax year, then 25p per mile.
  • Motorcycles — 24p per mile, flat (unchanged).
  • Bicycles — 20p per mile, flat (unchanged).

Before 6 April 2026 the first-10,000-mile rate for cars and vans was 45p, where it had sat since 2011 — so returns for 2025/26 and earlier years still use 45p. The increase applies from the start of the 2026/27 tax year, so every business mile you drive this year earns the new rate. As a worked example: 8,000 business miles in 2026/27 is 8,000 × 55p = £4,400 off your taxable profit (the same miles last year were worth £3,600).

One clarification worth making: this article covers the SELF-EMPLOYED position — HMRC's simplified expenses flat rate that sole traders claim on their own vehicles through Self Assessment. Employees reimbursed by an employer use the separate approved mileage payment (AMAP) rules, and businesses claiming actual vehicle costs are outside the flat-rate scheme entirely.

The rate is all-inclusive: fuel, insurance, servicing, repairs, depreciation. Claim mileage and you can't also claim those running costs — though tolls, parking and congestion charges are separate and still claimable.

Mileage or actual costs?

You choose per vehicle: simplified mileage, or the business proportion of actual running costs (plus capital allowances). High-mileage, cheap-to-run vehicles usually favour the mileage rate; expensive vans doing lower mileage can favour actual costs. Once you've used simplified expenses for a vehicle you generally stick with it for that vehicle — so it's worth doing the comparison in year one.

What counts as a business mile

Site to site, home to a temporary workplace, trips to the merchant, the wholesaler run — yes. Ordinary commuting to a single regular workplace — no. For subcontractors moving between jobs, most driving is genuinely business mileage, which is why recording it matters so much.

The record you need

Date, destination or purpose, and miles. That's it — but it has to exist. A week-old guess is exactly the kind of record that collapses under questions.

This article is general information for UK sole traders and subcontractors, not tax, accounting or financial advice. Rules change — check current HMRC guidance or speak to an accountant about your own position.