The short answer
- Cars and vans: 45p a mile for the first 10,000 business miles in the tax year, 25p a mile after that.
- Motorcycles: 24p a mile. Bicycles: 20p a mile.
- Commuting to your normal workplace is not business mileage.
The approved mileage rates
HMRC’s approved mileage allowance payments (AMAP) are the same for petrol, diesel, hybrid and electric vehicles. They are meant to cover all the costs of running the vehicle: fuel, insurance, servicing, tax, repairs and wear and tear.
| Vehicle | First 10,000 business miles | Above 10,000 |
|---|---|---|
| Car or van | 45p | 25p |
| Motorcycle | 24p | 24p |
| Bicycle | 20p | 20p |
The 10,000 miles are counted across the whole tax year, 6 April to 5 April, and across all your business journeys in cars and vans. Once you pass 10,000, every further mile is at 25p, so the average rate falls as mileage rises.
What counts as a business journey
A journey counts if you make it for work, other than ordinary commuting. Typical examples:
- visiting a client, customer or supplier;
- travelling to a temporary workplace, such as a building site or a client’s office for a project;
- going to a training course for your current job or trade;
- driving between two of your workplaces during the day;
- collecting stock or materials, or going to the bank or post office for the business.
Commuting between home and a permanent workplace does not count, even if you work on the way. A workplace is usually temporary if you go there for a limited task or period. For employees, a workplace stops being temporary if you expect to spend 40% or more of your working time there for more than 24 months.
Working from home
If your home is genuinely your business base, as it is for many sole traders, journeys from home to clients and suppliers are business journeys. For an employee who simply chooses to work from home some days, the journey to the office is still commuting.
Mileage for the self-employed
Sole traders and partners can claim the mileage rates as simplified expenses for cars, vans and motorcycles. Bicycles are not included: claim the business share of a bike’s actual costs instead. The claim is a business expense, so it cuts your profit and therefore your Income Tax and Class 4 National Insurance.
- 8,000 miles at 45p£3,600
- Income Tax saved at 20%£720
- Class 4 NI saved at 6%£216
A higher-rate sole trader saves 42% instead, £1,512 on the same mileage. Limited companies cannot use simplified expenses; instead, the company can pay a director the approved rates tax-free for business use of their own car.
Mileage rate or actual costs?
Sole traders can choose between two methods for each vehicle:
- Claim
- 45p / 25p per business mile
- Records
- A mileage log
- Vehicle cost
- Included in the rate
- Best for
- Cheaper cars, moderate mileage
- Claim
- Business share of all running costs
- Records
- Every receipt plus a log
- Vehicle cost
- Capital allowances
- Best for
- Expensive vehicles, high business use
Under actual costs you claim the business share of fuel, insurance, servicing, repairs, road tax and breakdown cover, plus capital allowances on the vehicle itself. If you drive 12,000 miles a year, 8,000 of them for business, you claim two-thirds of those costs.
Once chosen, it sticks
If you use the mileage rate for a vehicle, you must keep using it for as long as you use that vehicle in the business. You cannot switch to actual costs in a year with a big repair bill. Vans are the main exception to watch: many van users do better on actual costs with capital allowances, so decide before the first claim.
Whichever method you use, you can claim parking, tolls and congestion charges for business journeys on top. Fines are never allowable.
Mileage for employees
If you use your own vehicle for work, your employer can pay you up to the approved rates tax-free. Many pay less. You can then claim Mileage Allowance Relief on the difference.
- Approved amount: 5,000 × 45p£2,250
- Paid by your employer: 5,000 × 25p−£1,250
- Relief you can claim£1,000
The relief reduces your taxable income, so the saving is your tax rate times the claim: £200 at 20%, £400 at 40%. If your employer pays nothing, you claim relief on the whole approved amount.
Claim online or with form P87 if your work expenses are £2,500 or less and you do not file a tax return; otherwise claim through Self Assessment. You can claim for up to four previous tax years, and HMRC may adjust your tax code for future years.
When your employer pays more
If your employer pays more than the approved rate, the excess is taxable pay and goes through payroll or on your P11D. A common case is a flat rate that ignores the 10,000-mile drop.
| Situation | Employer pays | Approved amount | Result |
|---|---|---|---|
| 1,000 miles at 55p | £550 | £450 | £100 taxable |
| 12,000 miles at a flat 45p | £5,400 | £5,000 | £400 taxable |
| 5,000 miles at 25p | £1,250 | £2,250 | Claim relief on £1,000 |
| 3,000 miles, nothing paid | £0 | £1,350 | Claim relief on £1,350 |
Passengers
An employer can pay up to 5p a mile extra, tax-free, for each fellow employee you carry on a business journey in a car or van. If your employer does not pay it, you cannot claim relief for it. The self-employed cannot claim a passenger rate.
Company cars and electric vehicles
The approved mileage rates are for your own vehicle. If you drive a company car, different rules apply: your employer can reimburse business fuel at HMRC’s advisory fuel rates, which are set quarterly by engine size and fuel type, with a separate advisory electricity rate for fully electric company cars.
For your own electric car, the normal 45p and 25p rates apply. Because electricity is often cheaper per mile than petrol or diesel, the approved rate can work out well for EV drivers who charge at home.
Keeping a mileage log
For every business journey, record:
- the date;
- where you started and finished, ideally with postcodes;
- the reason for the journey, such as the client or site;
- the business miles.
A spreadsheet, a notebook in the car or an app all work, as long as the records are made at the time. HMRC can ask for them, and a claim without a log is easy to challenge. Sole traders must keep records for at least five years after the 31 January filing deadline; employees should keep them in case HMRC checks a relief claim.
A year of mixed travel
A self-employed electrician drives 12,000 business miles in 2026/27 in their own van, on the mileage rate. They also take the train to two trade shows and stay one night at each.
- First 10,000 miles at 45p£4,500
- Next 2,000 miles at 25p£500
- Train fares, two hotel nights and meals awayClaimed at cost
- Parking and tollsClaimed at cost
At the basic rate, the £5,000 mileage claim saves £1,300 in Income Tax and Class 4 NI. The average rate across the year is 41.7p a mile, because the last 2,000 miles are at 25p.
If the same electrician had already claimed 8,000 miles before switching to a new van, the first 2,000 miles in the new van would be at 45p and the rest at 25p. The 10,000-mile limit applies across all your cars and vans in the year, not to each vehicle.
Company directors
A director who uses their own car for company business is treated like an employee. The company can pay them the approved rates tax-free, and the payments are an allowable expense for the company, saving Corporation Tax.
This is often a tax-efficient way to cover the cost of a personal car used for work, because the director pays no Income Tax or National Insurance on the payments and the company gets relief. If the company pays less than the approved rate, the director can claim Mileage Allowance Relief on the difference.
A car owned by the company is different: it usually creates a taxable benefit in kind, and fuel for private use can trigger a separate fuel benefit charge. The benefit-in-kind calculator covers company cars.
Other travel you can claim
The same business travel rules apply to other costs of getting around:
- train, bus, coach and air fares for business journeys;
- taxis, where a taxi is reasonable for the journey;
- hotels and reasonable meals when you stay away overnight on business;
- meals while travelling away from your normal base, but not your everyday lunch.
These are claimed at cost with receipts, whether you are self-employed or an employee reclaiming through your employer. The allowable expenses calculator totals them with your other business costs.
Is 45p enough?
The 45p rate has not changed since 2011, while the cost of buying and running a car has risen. Whether it covers your real costs depends on the vehicle. For a small, economical car the rate can be generous; for a large van, or a car bought new at a high price, it may fall short.
If you are self-employed and think your actual costs are higher, work out both methods for a new vehicle before your first claim, because you cannot switch later. Employees cannot claim actual costs: the approved rate is the most they can receive tax-free or claim relief on.