Short answer: From 6 April 2026 the simplified mileage rate for self-employed people using a car or van is 55p per mile for the first 10,000 business miles and 25p per mile after that. Motorcycles are 24p per mile. You can use it instead of claiming actual vehicle running costs, but not for a vehicle you have claimed capital allowances on.
For delivery drivers, couriers, tradespeople and private hire drivers, vehicle costs are often the biggest expense claim. HMRC lets you claim either actual costs or a flat rate per mile. The car rate rose in April 2026 for the first time in years, so it is worth re-running the numbers. This guide explains the rates and how to choose.
2026/27 simplified mileage rates
| Vehicle | From 6 April 2026 | Before 6 April 2026 |
|---|---|---|
| Cars and goods vehicles, first 10,000 miles | 55p | 45p |
| Cars and goods vehicles, after 10,000 miles | 25p | 25p |
| Motorcycles | 24p | 24p |
The rates are per business mile and cover the whole cost of running the vehicle, including fuel, insurance, servicing, repairs and depreciation. You can still add parking, tolls and congestion charges separately.
Who can use simplified expenses for mileage?
- Self-employed people using cars, vans or motorcycles.
- Not cars designed for commercial use, such as black cabs, hackney carriages or dual control driving instructors’ cars.
- Not a vehicle you have already claimed capital allowances for.
Mileage versus actual costs
Mileage rate: simple and needs a mileage log. Actual costs: you claim the business share of fuel, insurance, MOT, repairs and capital allowances for the vehicle. Actual costs often win when your car is expensive to run or you have high repair bills, while mileage often wins for efficient cars and long distances. Once you choose a method for a vehicle you generally stay with it, so work out both in your first year.
Worked example: a delivery driver
Sofia drives 14,000 business miles in 2026/27 in her own car.
- First 10,000 miles at 55p: £5,500.
- Next 4,000 miles at 25p: £1,000.
- Total claim: £6,500.
With the old 45p rate her claim would have been £5,500, so the April 2026 change adds £1,000 to her deduction. At 20% tax and 6% Class 4 NI that saves her roughly £260 a year.
What counts as a business mile?
Business journeys include travel to customers, collections and deliveries, and trips to suppliers. Ordinary commuting to a permanent workplace does not count. If you work from home as your base, journeys from home to clients can usually be claimed. Keep a record with the date, start and end points, purpose and miles.
Do you still need to keep receipts?
With simplified expenses you do not claim actual vehicle costs, so you do not need receipts for them. You still need records for everything else. Our guide to allowable expenses for the self-employed covers the full list and shows what else drivers can claim.
Tips for drivers
- Use a mileage app or a simple notebook every day.
- Separate personal and business miles from the start.
- For delivery and courier work, read our guide for delivery drivers and couriers.
- Taxi and private hire drivers should see tax returns for taxi and private hire drivers.
Once you have your total mileage claim, it feeds into your profit. See how to calculate your tax bill as a sole trader. For help with the claim, our self-employed tax return service handles it for a fixed fee.
How much could the new 55p rate save you?
| Business miles a year | Claim at old rates (45p/25p) | Claim at 2026/27 rates (55p/25p) | Extra deduction |
|---|---|---|---|
| 6,000 | £2,700 | £3,300 | £600 |
| 10,000 | £4,500 | £5,500 | £1,000 |
| 15,000 | £5,750 | £6,750 | £1,000 |
| 25,000 | £9,500 | £10,500 | £1,000 |
The extra deduction is capped at £1,000 a year because the higher rate only applies to the first 10,000 miles. At a 26% combined tax and National Insurance rate that is up to about £260 saved a year.
Actual costs: when they win
With the actual costs method you claim the business proportion of fuel, insurance, servicing, road tax, repairs, breakdown cover and, in effect, the cost of the vehicle through capital allowances. Suppose a van costs £6,000 a year to run and you use it 80% for business. Your claim is £4,800 before capital allowances. If you drive 8,000 business miles, the simplified rate would give £4,400, so actual costs win slightly. If the same van cost £3,500 to run, the simplified rate wins easily. The break-even depends on your car, your mileage and how much of the use is private.
Electric vehicles and the mileage rate
The simplified rates apply to cars regardless of fuel type, and HMRC has separate advisory fuel rates for company cars. If you drive an electric car for self-employed work, the flat 55p and 25p can still be used, but your own actual costs might be lower or higher depending on charging. Charging at home is a private cost that needs to be apportioned if you choose actual costs. Check the position for your vehicle and the capital allowance rules if you buy a new electric car.
What delivery drivers, couriers and private hire drivers can add on top
- Parking, tolls and congestion charges for business trips.
- Phone costs and data used for work, apportioned for personal use.
- Delivery bags, high-visibility clothing and tools.
- Insurance specific to business use, such as hire and reward cover, if you do not use the flat rate. Note that the flat rate already includes vehicle insurance.
- Licence fees, such as private hire licences, and compulsory vehicle checks.
If you drive for platforms, income reported by the platform should match your return. Read our guide to delivery drivers and couriers for a trade-specific walk-through.
Keeping a compliant mileage log
- Record the date of each journey.
- Note the start and finish points.
- Record the business purpose, such as client name or delivery run.
- Record the miles for each trip and the odometer readings at the start and end of the tax year.
- Back up your log digitally so that it is available if HMRC asks.
A mileage app can automate this using GPS. Whichever you choose, the log must be a contemporaneous record, not an estimate created later from memory.
Do you need to choose the method up front?
For a vehicle you must choose the method in the first year and generally stay with it for that vehicle. If you buy a new vehicle later, you can reconsider. If you have claimed capital allowances for the vehicle, you cannot switch to the flat rate. Therefore it is worth running the numbers before you claim an allowance on a vehicle you might use the simplified rate for.
How this affects your tax bill
A mileage claim reduces your profit, and so reduces your Income Tax and Class 4 National Insurance. For example, an extra £6,500 mileage claim could cut a £30,000 profit to £23,500, saving about £1,690 at a 26% marginal rate. Use our self-employed tax calculator to see the effect on your own figures, and read how to calculate your tax bill as a sole trader for the full method. For a fixed-fee return that handles expenses for you, get a quote.
Frequently asked questions
What is the self-employed mileage rate for 2026/27?
55p per mile for the first 10,000 business miles in a car or van, 25p per mile after that, and 24p per mile for motorcycles.
Can I claim mileage and fuel together?
No. Simplified mileage covers fuel, insurance, repairs and depreciation, so you cannot also claim those costs for the same vehicle. You can add parking and tolls.
Can I claim mileage for commuting?
No. Travel from home to a permanent workplace is not a business journey. Journeys to clients and suppliers can be claimed.
Should I use mileage or actual costs?
Work out both for the first year. High-running-cost vehicles often do better on actual costs, while efficient cars on long distances often do better on mileage.
Can black cab drivers use the mileage rate?
No. Cars designed for commercial use, such as black cabs, cannot use simplified mileage rates, so they claim actual costs.
Want an accountant to do it for you?
Our qualified accountants prepare and file your return for a fixed fee, agreed before we start. Get a free quote, see our prices or call 0203 4411 258.
Last reviewed 28 October 2026. This guide is general information for UK taxpayers and is not personal tax advice. Scottish income tax rates differ from those shown.
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Reviewed and kept up to date by our expert team of ICAEW, ACCA and AAT qualified accountants. Last updated . This page is general guidance, not personal advice.
