Mileage allowance for the self-employed
Sole traders can use HMRC's simplified expenses — a flat 55p per mile — instead of working out the real running cost of the vehicle.
Work out your mileage claim
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Uses the HMRC approved mileage allowance payment (AMAP) rates for 2026/27: 55p per mile for the first 10,000 business miles, then 25p.
Simplified expenses vs actual costs
You choose one method per vehicle and stick with it for as long as you have that vehicle.
| Simplified (per mile) | Actual costs | |
|---|---|---|
| What you record | Business miles only | Every receipt: fuel, insurance, servicing, repairs, plus capital allowances |
| Best when | You drive a lot in an efficient, cheap-to-run car | The vehicle is expensive to run or you bought it recently |
| Effort | Low — a mileage log is enough | High — full records and apportionment |
You cannot mix the two for the same vehicle in the same year, so it is worth doing the sum once before you decide.
How much mileage can I claim as a sole trader?
A sole trader who drives 6,000 business miles in 2026/27 can deduct 6,000 × 55p = £3,300.00 from their profit. At the basic rate of Income Tax plus Class 4 National Insurance that is worth several hundred pounds in tax saved — and the figure grew by 10p a mile on 6 April 2026, when the rate rose from 45p.
| Business miles in 2026/27 (car or van) | Simplified expense you can deduct |
|---|---|
| 2,000 | £1,100.00 |
| 5,000 | £2,750.00 |
| 8,000 | £4,400.00 |
| 10,000 | £5,500.00 |
| 15,000 | £6,750.00 |
Past 10,000 miles each extra mile adds 25p, not 55p — the threshold counts your business miles across the whole tax year, not per trip.
Is there a self-employed fuel allowance?
Not as a separate allowance. When people search for a self-employed fuel or petrol allowance, the answer is the per-mile rate above: 55p a mile already includes fuel, along with insurance, servicing, road tax and depreciation. The alternative is to claim the business share of your actual fuel and running costs instead, from receipts.
Can I claim fuel as well as mileage?
No. The flat rate is designed to cover fuel, insurance, servicing, tax and depreciation together, so adding fuel receipts on top would claim the same cost twice. Parking and tolls on a business trip are separate and can be claimed alongside the mileage.
What about limited company directors?
Simplified expenses are for sole traders and partnerships. If you trade through a limited company you are its employee: the company can pay you up to 55p a mile tax-free, and if it pays less you can claim relief on the difference.
What records do I need?
Keep a dated record of each business journey — where from, where to, why, and how far. Commuting to a permanent base does not count; driving between clients, sites and suppliers does. A mileage log template works, as long as you fill it in as you go rather than rebuilding the year from memory in January.
Stop reconstructing your mileage from memory
Odo logs your drives automatically in the background, you swipe each one business or personal, and it totals your claim at the 2026/27 rates — with a CSV export of every trip: date, reason, distance and the start and end postcodes HMRC asks for in a PAYE claim.