From 6 April 2026, self-employed simplified mileage climbs to 55p per mile for the first 10,000 business miles, then 25p after that, with motorcycles at 24p and bicycles at 20p. Only sole traders and partnerships can use this flat rate, and it works best for lower-mileage drivers in modest cars rather than high-mileage or expensive vehicles.
TL;DR:
- The new 55p per mile rate applies for the first 10,000 business miles driven in 2026/27, increasing potential tax savings for low-mileage drivers in modest vehicles.
- Only sole traders and partnerships can use the simplified mileage method, which cannot be applied if capital allowances have been claimed on the vehicle.
- Business miles exclude regular commuting, but trips to multiple client sites or to a temporary workplace under 24 months qualify as business travel.
- Choosing between simplified mileage and actual costs depends on vehicle type, age, annual mileage, and whether you plan to change your vehicle, with re-evaluation recommended before purchasing new vehicles.
- Accurate, contemporaneous records of each journey, including date, start and end points, mileage, purpose, and passengers, are crucial to substantiate claims and avoid penalties.
Table of Contents
- Mileage allowance self employed: current rates at a glance for 2026/27
- Who can use simplified mileage and what stops you
- Which journeys actually count as business mileage?
- Simplified mileage or actual costs: which suits you?
- What records HMRC expects you to keep
- How to claim mileage on your Self Assessment return
- A worked example at the new 2026/27 rate
- Common mileage mistakes I see in client work
- Need help getting your mileage claim right?
- Sources
Mileage allowance self employed: current rates at a glance for 2026/27
The rate increase is real money in your pocket if you drive for business. From 6 April 2026, the approved rate for cars and vans rises to 55p for the first 10,000 business miles and 25p for every mile after that.
| Vehicle type | First 10,000 miles | After 10,000 miles |
|---|---|---|
| Car or van | 55p | 25p |
| Motorcycle | 24p | 24p |
| Bicycle | 20p | 20p |
| Passenger payment | 5p per passenger | 5p per passenger |
These figures come straight from GOV.UK’s official rates table, so you can rely on them when you’re filling in your return.
Pro Tip: This is a deduction against your profit, not cash HMRC hands you. Multiply your business miles by the rate, and that figure reduces the profit you pay tax on. Because the change is backdated to 6 April 2026, it applies to journeys made throughout the 2026/27 tax year, ready to claim on that year’s Self Assessment return.
Who can use simplified mileage and what stops you
Simplified expenses are open to sole traders and partnerships. If you trade through a limited company, this method isn’t available to you at all; company directors claim vehicle costs differently, and that’s a separate conversation entirely.
A few practical restrictions catch people out:
- You cannot use simplified mileage on a vehicle where you’ve already claimed capital allowances.
- The choice is made per vehicle, and once you’ve picked a method for that vehicle, you generally stick with it for as long as you use it for business.
- Some vehicles, particularly those used partly for hire or held on complex finance arrangements, need a closer look before you assume simplified mileage applies.
- Passenger payments of 5p per mile can be claimed on top, but only where the passenger is also travelling for a genuine business reason.
Get the vehicle decision right at the start, because switching later isn’t straightforward.
Which journeys actually count as business mileage?
This is where most self-employed drivers trip up. HMRC applies a “wholly and exclusively” test, meaning the journey must be for business purposes and nothing else. HMRC’s internal manual sets out how this works in practice, and ordinary commuting from home to a regular place of work is excluded, full stop.
The distinction that matters is permanent workplace versus temporary workplace:
- Travel to a fixed, regular base of work doesn’t qualify, even if you’re self-employed.
- Travel between different client sites, or to a temporary job that lasts under 24 months, usually does qualify.
- Travel from home to your first appointment can qualify if your trade is itinerant and home genuinely functions as your base of operations.
HMRC’s own guidance recognises that some trades, market traders, mobile tradespeople, peripatetic consultants, don’t have a single fixed workplace. Where home is the base of operations, journeys from home to the first job of the day can count as business travel rather than commuting.
A plumber driving between three different customer addresses in one day is on business mileage throughout. A consultant who drives to the same rented office every morning is commuting, no matter how self-employed they are.
Simplified mileage or actual costs: which suits you?
You have two routes, and only one applies per vehicle. Simplified mileage is the flat-rate approach above. The alternative, actual costs plus capital allowances, means tracking every real expense and claiming a business-use percentage of it.
Actual-cost claims typically include:
- Fuel and oil
- Insurance and breakdown cover
- Servicing, repairs and MOT
- Vehicle road tax
- Capital allowances on the purchase cost, apportioned for business use
Comparative analysis of the two approaches suggests simplified mileage tends to favour drivers with modest annual mileage in cheaper, older cars, while actual costs plus capital allowances often work out better for high-mileage drivers or those running expensive vehicles, including many electric cars.
Pro Tip: Re-run the comparison every time you’re about to buy a new vehicle, not just when you start trading. Remember the lock-in: claim capital allowances on a vehicle and you can’t switch that vehicle to simplified mileage later, so decide before you buy, not after.
What records HMRC expects you to keep
A mileage claim is only as strong as the log behind it. HMRC’s guidance on expenses expects a contemporaneous record, something written down at or near the time of the journey, not reconstructed months later from memory.
At minimum, your log needs:
- The date of the journey
- Start and end postcodes or addresses
- Total miles travelled
- The business purpose of the trip
- Names of any business passengers, where you’re claiming the passenger rate
Keep these records for five years after the 31 January deadline following the tax year in question. A phone app with GPS tracking, a simple spreadsheet, or entries logged directly into cloud software all work, and pairing digital mileage logs with parking and toll receipts gives you a complete picture if you want to learn more about appointment scheduling software for accountants.
How to claim mileage on your Self Assessment return
Once you know your total business miles, the calculation goes straight into the self-employment pages of your Self Assessment return as part of your allowable expenses figure.
A few things worth clarifying, because the terminology gets muddled constantly:
- Simplified mileage for the self-employed is a completely different system from employee Approved Mileage Allowance Payments, which employers use to reimburse staff tax-free, and from company-car Advisory Fuel Rates, which apply only to company vehicles.
- If you’re employed rather than self-employed and your employer reimburses less than the approved rate, you claim the shortfall through Mileage Allowance Relief, either via a P87 form or your own Self Assessment return.
- Because the 55p rate applies from 6 April 2026, if you’d been provisionally recording mileage at the old 45p rate earlier in the year, you claim the uplift when you complete your 2026/27 return.
Getting the allowable expenses categorisation right here saves a lot of back-and-forth later.
A worked example at the new 2026/27 rate
Here’s the arithmetic in full. A sole trader who drives 8,000 business miles in 2026/27 claims:
| Calculation | Result |
|---|---|
| 8,000 miles Ă— 55p | ÂŁ4,400 deduction |
| Illustrative tax saving at 20% basic rate | ÂŁ4,400 |
| Illustrative tax saving at higher rate | ÂŁ1,760 |
That ÂŁ4,400 comes straight off taxable profit before you work out what you owe. An actual-cost calculation for the same driver would need fuel receipts, insurance invoices, servicing bills and a capital allowances figure, then a business-use percentage applied across all of it, considerably more admin for a result that, for most modest-mileage drivers, lands in a similar place. For more worked examples across other expense categories, see sole trader tax deductions.
Common mileage mistakes I see in client work
Working with sole traders and landlords across Kent, the same mistakes crop up again and again. Drivers claim commuting miles by mistake, mix up simplified mileage with the actual-cost method partway through the year, or lose their log entirely and try to reconstruct twelve months of journeys from bank statements in January.
My checklist with clients is simple: re-run the simplified-versus-actual comparison before replacing a vehicle, keep a genuinely contemporaneous log rather than a retrospective guess, and claim parking and toll costs separately rather than folding them into the mileage figure. Get the method wrong on a vehicle and you’re often stuck with it, so the decision deserves five minutes of proper thought, not an afterthought in January.
— Chris
Need help getting your mileage claim right?
There’s a real cost to getting this wrong, either underclaiming what you’re owed or building a mileage log that falls apart under scrutiny. I help sole traders, landlords and small business owners set up mileage tracking that actually holds up, choose between simplified mileage and actual costs with confidence, and file Self Assessment returns without the January scramble.
Whether you need your bookkeeping moved onto cloud accounting software so mileage entries sit alongside the rest of your records, or you’d simply like someone to check your Self Assessment before it’s submitted, I can help directly. Take a look at my Self Assessment guide for Tonbridge or get in touch to talk through your mileage claim and what else might be sitting unclaimed in your accounts.
This article is general information, not a substitute for advice from a qualified financial advisor. Consult a qualified financial professional about your own circumstances before acting on anything here.
