The mileage allowance for self-employed workers is one of the most straightforward ways to cut your tax bill. It is also one of the most commonly misunderstood.
Using your own car, van, or motorcycle for work, the self-employed mileage allowance may let you reduce your taxable profit. This allowance is not a cash payment from HMRC.
It is an allowable expense that lowers your taxable profit each tax year. That reduction cuts the income tax and National Insurance you owe.
Many sole traders claim the mileage allowance for self-employed purposes year after year. They may not realise that the allowance applies in two ways, and that the choice between them matters.
Understanding the self-employed mileage allowance rules before you file for the first time is worthwhile. It helps you avoid being locked into the wrong approach for your vehicle.
This article covers the rates, which journeys qualify, and how to record your mileage. It also explains how to enter the self-employed mileage allowance on your Self Assessment return.
What the Self-Employed Mileage Allowance Actually Covers
When you use your own vehicle for work, the costs do not disappear. Fuel, wear and tear, insurance, and servicing all add up over a tax year.
The self-employed mileage allowance lets you offset those costs against your taxable profit. That reduces the income tax and Class 4 National Insurance you pay each year.
The allowance does not produce a direct payment from HMRC. Instead, it reduces your profit figure on your Self Assessment return.
Consider a sole trader paying income tax at the basic rate of 20%. Saving £1,000 through the self-employed mileage allowance could cut their tax bill by roughly £200. A higher-rate taxpayer paying 40% would save £400 on the same £1,000 of expenses.
The governing test is wholly and exclusively: HMRC expects every claimed journey to have a sole business purpose.
The allowance applies to cars, vans, motorcycles, and bicycles. When you use the flat rate, all vehicle running costs are factored into the per-mile rate. Fuel, servicing, and insurance cannot be claimed separately on top.
Flat Rate or Actual Costs: Which Method Should You Use?
There are two ways to claim the self-employed mileage allowance as a sole trader. Each produces a different result, depending on how much you drive and the cost of running your vehicle.
The method you choose in your first year for a given vehicle locks you in for that vehicle. Switching to a different method later is restricted.
The flat rate (also known as simplified expenses) multiplies your business miles by a set HMRC rate. It requires minimal record-keeping. Mileage records alone are sufficient — no fuel receipts or insurance documents needed.
The actual costs method requires tracking every vehicle expense across the year: fuel, servicing, repairs, insurance, road tax, and MOT. You calculate the business proportion of those costs and claim that amount. This approach can produce a larger deduction for high-mileage drivers or expensive vehicles.
In your first year with a new vehicle, keep records for both methods. HMRC’s simplified expenses checker at GOV.UK lets you compare outcomes before committing to either.
There is also an important restriction around capital allowances. Once you claim capital allowances on a vehicle, the flat rate is no longer available for it. That is a one-way door worth noting before you file.
Self-Employed Mileage Allowance: Current HMRC Rates
HMRC sets the following approved rates under the simplified expenses method:
- Cars and vans: 45p per mile for the first 10,000 business miles, then 25p per mile above that threshold.
- Motorcycles: 24p per mile, with no reduction after 10,000 miles.
- Bicycles: 20p per mile, with no reduction after 10,000 miles.
The 10,000-mile threshold resets at the start of each tax year. It applies per vehicle, not across a fleet.
If you use two cars for business, each has its own 10,000-mile allowance at the higher rate.
Carrying a fellow worker as a passenger on a business journey means you may claim an extra 5p per mile. That passenger must also be travelling for business purposes.
Electric vehicles are treated the same as petrol or diesel cars under the self-employed mileage allowance. The current 45p and 25p rates apply to personal EVs used for business.
HMRC publishes a separate advisory electricity rate for company-owned EVs. That rate does not apply to a personal electric vehicle used by a self-employed person.
Which Journeys Qualify as Business Mileage?
HMRC applies the “wholly and exclusively” test to every journey you claim. The trip must have a sole business purpose.
A journey that is partly personal and partly work-related would typically not qualify. The business element must be genuinely distinct from any personal component.
The self-employed mileage allowance covers only journeys that meet that test. Ordinary commuting to a fixed regular workplace does not qualify.
Travel from your home to an office, a unit, or a regular client’s premises is treated as a commute. Distance does not change that outcome.
However, travel to a temporary workplace can qualify. HMRC defines a temporary workplace as one you attend for a limited period or purpose. You must also spend less than 40% of your working time there.
The 24-month rule is equally important. Attending a particular site for more than 24 months leads HMRC to treat it as a permanent workplace. At that point, those journeys cannot be claimed.
Working from home changes the picture for many self-employed people. If your home is your genuine permanent base of business, journeys to client sites may qualify as business mileage.
HMRC expects substantive duties to be carried out at home on a regular basis. Simply having a desk there is unlikely to be sufficient.
How to Record Mileage the Self-Employed Way
HMRC does not require you to submit mileage records when you file your Self Assessment return. You do need to retain those records for at least five years after the 31 January filing deadline.
If HMRC opens an enquiry, it can request evidence of every journey claimed. Records need to be specific enough that each journey could be recreated.
For each business journey, your log should include the following details:
- The date of travel.
- The starting point and destination.
- The purpose of the trip.
- The total miles driven.
A note reading “client visit, 45 miles” is unlikely to satisfy HMRC during an enquiry. The more specific your record, the more defensible your claim.
Paper logbooks are acceptable, as are spreadsheets stored securely online. Dedicated mileage tracking apps log trips via GPS and categorise them as business or personal in real time.
Making Tax Digital (MTD) for Income Tax now applies to sole traders with qualifying income above the relevant threshold. If you use MTD-compatible software, confirm that its mileage tracking function produces HMRC-compliant records.
The self-employed mileage allowance requires solid records to stand up to scrutiny. Retain a detailed log for at least five years after the filing deadline. HMRC may request those records during an enquiry.
Estimated mileage carries more risk. A journey-by-journey log is far more defensible during an HMRC enquiry than a percentage estimate of annual mileage.
Claiming Self-Employed Mileage Allowance on Self Assessment
When you complete your Self Assessment return, vehicle expenses go into the self-employment section. Look for the “Car, van and travel expenses” category.
If you are using the flat rate, multiply your total business miles by the relevant HMRC rate. Enter the result as your vehicle expense.
You do not need to itemise individual journeys on the return. The mileage log sits behind the return as supporting evidence, available if HMRC asks for it.
If you use the actual costs method, calculate the total annual cost of running the vehicle. Then determine the business use percentage from your mileage records. Enter the business proportion as the allowable expense.
Both the cash basis and traditional accounting approaches permit the self-employed mileage allowance for vehicles. The outcome is the same under either approach, provided you meet the eligibility conditions.
HMRC may ask for supporting evidence after your tax return has been processed. Keeping a complete mileage log from the start of the tax year removes most of that risk.
Backdating a Self-Employed Mileage Allowance Claim
Not claiming the self-employed mileage allowance in previous tax years does not mean that relief is gone. You may still be able to recover some of it.
HMRC allows you to amend a submitted Self Assessment return for up to four prior tax years. That means you could potentially correct returns going back four years from the current tax year.
To amend a return, log into your HMRC online account and find the relevant tax year’s Self Assessment. Navigate to the self-employment expenses section and update the “Car, van and travel expenses” figure.
Adding a brief note in the “any other information” box helps. Explain clearly that the amendment relates to previously unclaimed mileage expenses.
You need records to support any backdated claim. If records for earlier years are incomplete, documented business activity may help. Invoices, client correspondence, and diary entries can all support a claim — but a precise log is far more robust.
HMRC can and does challenge backdated claims where evidence is thin. The stronger your records, the more straightforward the amendment process.
Claiming your mileage allowance
The self-employed mileage allowance is a genuine and often underused way to reduce your tax bill. The flat rate suits most sole traders, keeping record-keeping simple and the admin manageable.
The actual costs method may produce a better result for high-mileage drivers or expensive vehicles. The choice locks in for the life of that vehicle, so it is worth calculating both before you file.
If you think mileage claims have gone unclaimed in earlier years, the four-year amendment window exists to correct that. It is worth a quick review of past returns.
For more information on allowable expenses and tax relief for sole traders, visit the self-employed sole trader tax page on taxrebateservices.co.uk.
Key Takeaways on the Self-Employed Mileage Allowance
This article covered the following key points:
- The self-employed mileage allowance reduces your taxable profit — it is not a direct cash payment from HMRC.
- You can claim using the flat rate or the actual costs method. The method you choose in your first year locks in for that vehicle.
- The current car and van flat rate is 45p per mile for the first 10,000 business miles. The rate drops to 25p per mile above that threshold.
- Only journeys that are wholly and exclusively for business qualify — ordinary commuting to a fixed workplace does not.
- Retain a detailed mileage log for at least five years after the filing deadline. HMRC may request records during an enquiry.
- If you have not claimed in previous years, you may be able to amend returns. The window covers up to four prior tax years.
Mileage Allowance Rate for Self Employed FAQs
Q1: What is the current mileage allowance rate for self-employed workers?
HMRC sets the flat rate for cars and vans at 45p per mile for the first 10,000 business miles in a tax year, then 25p per mile above that threshold. Motorcycles are reimbursed at 24p per mile and bicycles at 20p per mile, with no step-down after 10,000 miles for either. These rates cover all vehicle running costs including fuel, insurance, and depreciation, so you cannot claim those items separately on top.
Q2: Can I claim the self-employed mileage allowance if I drive an electric vehicle?
Yes. Under the simplified expenses method, personal electric vehicles used for business by self-employed people are treated the same as petrol or diesel cars. The current HMRC rates of 45p per mile for the first 10,000 business miles and 25p per mile thereafter apply to personal EVs. HMRC publishes a separate advisory electricity rate, but that applies only to company-owned electric vehicles, not to a personal vehicle used by a sole trader.
Q3: Can you backdate a mileage claim on a Self Assessment return?
HMRC allows you to amend a submitted Self Assessment return for up to four prior tax years, so mileage costs unclaimed in earlier years may still be recoverable. To amend a return, log into your HMRC online account, navigate to the relevant tax year’s self-employment expenses section, and update the vehicle and travel costs figure. You need mileage records or other documented evidence to support any backdated claim.
Q4: Does ordinary commuting count as business mileage for self-employed people?
No. HMRC treats travel between your home and a fixed, regular place of work as ordinary commuting, which is not an allowable expense regardless of distance. The key exception is travel to a temporary workplace — one you attend for a limited period, where you spend less than 40% of your working time, and which you expect to attend for fewer than 24 months. Sole traders whose home genuinely functions as their permanent business base may be able to claim journeys from home to client sites, provided HMRC’s temporary workplace test is met.
Q5: What mileage records does HMRC expect for a self-employed claim?
HMRC does not require you to submit mileage records with your Self Assessment return, but you must retain them for at least five years after the 31 January filing deadline. For each business journey, your log should record the date of travel, the starting point, the destination, the purpose of the trip, and the total miles driven. Paper logbooks, spreadsheets, and GPS-based mileage tracking apps are all acceptable formats.
