How to claim mileage as a tradesperson in the UK
Quick answer: Self-employed tradespeople can claim 45p per mile for the first 10,000 business miles and 25p per mile after that using HMRC's simplified expenses. Or claim actual costs (fuel, insurance, servicing, depreciation) and apportion for business use. You cannot do both.
Two ways to claim vehicle costs
HMRC gives you two options for claiming vehicle costs on your self-assessment. Pick one and you are locked in for that vehicle until you replace it.
Quick takeaway: Choose between simplified mileage expenses and actual costs based on your vehicle use and record-keeping preference.
Option 1: simplified mileage expenses
This is the straightforward option. Track your business miles and multiply by the approved rate:
If you need the paperwork side too, see our guide to self assessment tax guide for tradespeople.
Miles per year | Rate per mile |
|---|---|
First 10,000 | 45p |
Above 10,000 | 25p |
A plumber driving 15,000 business miles per year claims: (10,000 x 45p) + (5,000 x 25p) = £4,500 + £1,250 = £5,750. At the basic tax rate of 20%, that saves £1,150 in tax plus £523.50 in Class 4 NI.
For the tax angle, read self-employed tax deadlines for 2026/27.
The 45p rate is meant to cover fuel, insurance, road tax, MOT, servicing, depreciation, and wear. You cannot claim any of those separately if you use this method.
Related: allowable expenses for the self-employed.
Option 2: actual costs
Track every vehicle-related expense: fuel, insurance, road tax, MOT, servicing, repairs, tyres, breakdown cover, lease payments or depreciation. Then work out the business percentage based on mileage.
Example: an electrician's van costs £8,200 a year to run (all costs included). He drives 20,000 miles total, of which 16,000 are business miles. Business percentage: 80%. Claim: £6,560.
Compare that to simplified mileage: (10,000 x 45p) + (6,000 x 25p) = £6,000. In this case, actual costs gives a bigger deduction.
Which method is better?
Generally:
Simplified mileage works better if you drive a low-cost vehicle, do most of your own maintenance, or cannot be bothered with detailed record-keeping
Actual costs works better if you run an expensive van, have high insurance premiums, or drive significantly more than 10,000 business miles
Run the numbers both ways before committing. Once you choose actual costs for a vehicle, you cannot switch back to simplified mileage for that vehicle.
What counts as a business mile?
This trips people up. Your regular commute from home to your usual place of work is not a business mile. But for tradespeople, this rule works differently because most of you do not have a fixed workplace.
If you travel directly from home to different customer sites each day, those are business miles. The key question is whether you have a "permanent workplace." If you work on a single long-term contract at one site for more than 24 months, HMRC may treat that site as your permanent workplace, and travel to it becomes commuting.
Business miles include:
Travelling between customer sites
Trips to suppliers or trade merchants
Travelling to temporary workplaces
Trips to your accountant, bank meetings, or training courses
Personal miles include:
Commuting to a permanent workplace
Trips to the shops, school run, weekend driving
Any journey that is not wholly for business purposes
How to track your mileage
HMRC does not require a specific format, but you need a contemporaneous record. That means recording miles as you drive, not reconstructing them from memory at year end.
Pro tip: Use a mileage tracking app to automatically log your business trips and avoid manual errors.
For each trip, record:
Date
Start and end location
Purpose of the trip
Miles driven
A simple spreadsheet works fine. There are also mileage tracking apps that use your phone's GPS to log trips automatically. Whatever method you use, keep the records for at least 5 years after the tax year they relate to.
Worth pairing this with sole trader expenses spreadsheet.
VAT on mileage
If you are VAT-registered and using simplified mileage, you can reclaim VAT on the fuel element of the mileage rate. HMRC publishes advisory fuel rates quarterly. For a diesel van (1,600-2,000cc engine), the current rate is 15p per mile. The VAT element is 15p divided by 6 = 2.5p per mile.
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On 15,000 business miles, that is £375 of reclaimable VAT. Small but worth claiming. You need fuel receipts to support the claim, so keep them.
Use our VAT calculator to work out your reclaimable amounts, and make sure your invoices are VAT-compliant if you are registered.
Company vehicles vs personal vehicles
If your business is a limited company and the company owns the vehicle, the rules differ. The company claims all running costs as a business expense, but you pay benefit-in-kind tax on personal use. For vans, the BIK rate for 2025/26 is £3,960 (taxed at your marginal rate). Zero-emission vans have a nil BIK rate until April 2027.
Feature | Company Vehicle | Personal Vehicle |
|---|---|---|
Ownership | Company owns | Individual owns |
Claim Method | Actual costs only | Simplified or actual costs |
Tax Implications | Benefit in kind tax | Tax relief on mileage |
Usage Flexibility | Business use only | Mixed use allowed |
Record Keeping | Detailed required | Simplified possible |
If you use your personal vehicle for company business, the company reimburses you at the approved mileage rates (45p/25p). These payments are tax-free up to the approved rates.
Common mistakes to avoid
Claiming commuting miles. If HMRC audits your mileage log and finds daily trips to the same site over 24 months, they will disallow the claim.
Not keeping fuel receipts. Even with simplified mileage, you need receipts if reclaiming VAT on the fuel element.
Switching methods. Once you use actual costs for a vehicle, you are committed for the life of that vehicle.
Forgetting to claim. Many tradespeople simply forget. At 15,000 business miles, that is £5,750 of deductions going unclaimed. File your self-assessment properly.
Frequently asked questions
Can I claim mileage if I have a company van?
If the company owns the van, the company claims actual running costs. You pay BIK tax on personal use. If you own the van personally and use it for company business, the company reimburses you at 45p/25p per mile tax-free.
Common mistake: Failing to separate personal and business mileage can lead to incorrect claims and potential fines.
Do I need to keep a mileage log?
Yes. HMRC requires contemporaneous records. Record each business trip with the date, destination, purpose, and miles. Keep records for at least 5 years.
Can I claim bicycle mileage?
Yes. The approved rate for bicycles is 20p per mile. The same record-keeping requirements apply.
What if I use my vehicle for both business and personal trips?
With simplified mileage, you only claim business miles. With actual costs, you calculate the business percentage based on total miles versus business miles and claim that proportion.
Are the mileage rates changing in 2026?
The 45p and 25p rates have been unchanged since 2011. There is ongoing pressure to increase them given fuel cost rises, but no change has been announced for 2026/27.
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